C. SCC 35033 - Respondent Sylvan Adams' Factum

Henri A. Lafortune Inc. 2005 Limoges Street Tel.: 450 442-4080 Longueuil, Québec J4G 1C4 Fax: 450 442-2040 www.halafortune.ca [email protected] L-3595-12

File No. 35033

SUPREME COURT OF CANADA

(ON APPEAL FROM A JUDGMENT OF THE QUÉBEC COURT OF APPEAL) BETWEEN:

AMEX BANK OF CANADA APPELLANT

(Appellant) - and -

SYLVAN ADAMS RESPONDENT

(Respondent) - and -

ATTORNEY GENERAL OF QUÉBEC and

LE PRÉSIDENT DE L’OFFICE DE LA PROTECTION DU CONSOMMATEUR

RESPONDENTS (Interveners)

- and - ATTORNEY GENERAL OF CANADA ATTORNEY GENERAL OF ONTARIO

ATTORNEY GENERAL OF BRITISH COLUMBIA ATTORNEY GENERAL OF ALBERTA

INTERVENERS

RESPONDENT SYLVAN ADAMS’ FACTUM

Mr. Peter Kalichman Ms. Catherine McKenzie Mr. Mathieu Bouchard Irving Mitchell Kalichman LLP 2 Place Alexis Nihon, Suite 1400 3500 De Maisonneuve Blvd. West Montréal, Québec H3Z 3C1 Tel.: 514 935-4460 Fax: 514 935-2999 [email protected] [email protected] [email protected] Counsel for Respondent Sylvan Adams

Mr. Guy Régimbald Gowling Lafleur Henderson LLP 26th Floor 160 Elgin Street Ottawa, Ontario K1P 1C3 Tel.: 613 786-0197 Fax: 613 563-9869 [email protected] Agent for Respondent Sylvan Adams

mailto:[email protected]




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Mr. Mahmud Jamal Ms. Silvana Conte Mr. Alexandre Fallon Ms. Anne-Marie Legendre-Lizotte Mr. W. David Rankin Osler, Hoskin & Harcourt LLP Suite 2100 1000 de la Gauchetière Street West Montréal, Québec H3B 4W5 Tel.: 514 904-8100 Fax: 514 904-8101 [email protected] [email protected] [email protected] [email protected] [email protected] Counsel for Appellant Mr. Jean-François Jobin Mr. Francis Demers Mr. Samuel Chayer Bernard, Roy et Associés Suite 8.00 1 Notre-Dame Street East Montréal, Québec H2Y 1B6 Tel.: 514 393-2336 Fax: 514 873-7074 [email protected] [email protected] [email protected] Counsel for Respondent Attorney General of Québec Mr. Marc Migneault Allard, Renaud et Associés Suite RC 11 100 Laviolette Street Trois-Rivières, Québec G9A 5S9 Tel.: 888 672-2556 Ext. 3426 Fax: 819 371-6489 [email protected] Counsel for Respondent Le Président de l’Office de la protection du consommateur

Ms. Patricia J. Wilson Osler, Hoskin & Harcourt LLP Suite 1900 340 Albert Street Ottawa, Ontario K1R 7Y6 Tel.: 613 787-1009 Fax: 613 235-2867 [email protected] Agent for Appellant Mr. Pierre Landry Noël & Associés 111 Champlain Street Gatineau, Québec J8X 3R1 Tel.: 819 771-7393 Fax: 819 771-5397 [email protected] Agent for Respondent Attorney General of Québec Mr. Pierre Landry Noël & Associés 111 Champlain Street Gatineau, Québec J8X 3R1 Tel.: 819 771-7393 Fax: 819 771-5397 [email protected] Agent for Respondent Le Président de l’Office de la protection du consommateur













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Mr. Bernard Letarte Mr. Pierre Salois Mr. Michel Miller Justice Canada East Tower, 5th Floor 200 René-Lévesque Blvd. West Montréal, Québec H2Z 1X4 Tel.: 613-946-2776 (Mr. Letarte) Tel.: 514 283-8733 (Mr. Salois) Tel.: 514 283-3582 (Mr. Miller) Fax: 514 283-3856 [email protected] [email protected] [email protected] Counsel for Intervener Attorney General of Canada Attorney General of Ontario Ms. Nancy E. Brown Attorney General of British Columbia P.O. Box 9280 Stn Prov Govt 1001 Douglas Street Victoria, British Columbia V8W 9J7 Tel.: 250 356-5597 Fax: 250 356-9154 [email protected] Counsel for Intervener Attorney General of British Columbia

Mr. Christopher M. Rupar Attorney General of Canada Suite 557 50 O’Connor Street Ottawa, Ontario K1P 6L2 Tel.: 613 670-6290 Fax: 613 954-1920 [email protected] Agent for Intervener Attorney General of Canada Mr. Robert E. Houston, Q.C. Burke-Robertson LLP Suite 200 441 MacLaren Street Ottawa, Ontario K2P 2H3 Tel.: 613 236-9665 Fax: 613 235-4430 [email protected] Agent for Intervener Attorney General of Ontario Mr. Robert E. Houston, Q.C. Burke-Robertson LLP Suite 200 441 MacLaren Street Ottawa, Ontario K2P 2H3 Tel.: 613 236-9665 Fax: 613 235-4430 [email protected] Agent for Intervener Attorney General of British Columbia







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Attorney General of Alberta

Mr. Henry S. Brown, Q.C. Gowling Lafleur Henderson LLP Suite 2600 160 Elgin Street Ottawa, Ontario K1P 1C3 Tel.: 613 233-1781 Fax: 613 788-3433 [email protected] Agent for Intervener Attorney General of Alberta


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TABLE OF CONTENTS

RESPONDENT SYLVAN ADAMS’ FACTUM Page PART I – OVERVIEW AND STATEMENT OF FACTS .............................................. 1

A. Overview .............................................. 1

B. Facts .............................................. 1

PART II – QUESTIONS IN ISSUE .............................................. 4

PART III – ARGUMENT .............................................. 5

A. Sections 12, 219 and 272 of the C.P.A. are not constitutionally inapplicable to bank-issued credit and charge cards by reason of the doctrine of interjurisdictional immunity .............................................. 5

i. The provisions at issue in this case .............................................. 5

ii. The test for interjurisdictional immunity .............................................. 6

iii. The provisions at issue in this case do not impair core banking .............................................. 7

iv. Where no impairment exists with the provisions at issue, there is no need to consider potential impairments .............................................. 9

v. The C.P.A. as a whole does not impair core banking ............................................ 10

B. Sections 12, 219 and 272 of the C.P.A. are not constitutionally inoperative in respect of bank-issued credit and charge cards by reason of the doctrine of federal paramountcy ............................................ 12

i. The frustration of Parliament’s purpose test ............................................ 13

ii. The frustration of Parliament’s purpose test does not apply to duplicative provisions ............................................ 14

iii. Cooperative federalism ............................................ 16

iv. This Court should reject express extensions of paramountcy by legislative fiat ............................................ 17

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TABLE OF CONTENTS

RESPONDENT SYLVAN ADAMS’ FACTUM Page

v. It was not Parliament’s intention to create an exclusive regime for all banking products and services ............................................ 19

vi. There is no frustration of Parliament’s intention to preserve contracts entered into by banks ............................................ 21

vii. Severability ............................................ 22

C. Should Amex’s constitutional arguments be dismissed by this Court, the Respondent’s C.P.A. claim must succeed ............................................ 23

D. Was the Commission charged by Amex due under the relevant cardholder agreements, and if not, are the class members entitled to restitution? ............................................ 23

i. Reception of a thing not due is not grounded on the notion of “fault” ............................................ 24

ii. The cardholder agreements did not include an obligation to pay a fee for the conversion of foreign currencies ............................................ 25

a. The trial judge’s findings with respect to the interpretation of the cardholder agreements raise pure issues of fact or issues of mixed fact and law ............................................ 25

b. The Commission was a fee or a charge ............................................ 26

c. The cardholder agreements made no reference to the Commission ............................................ 28

d. Neither usage nor law imposed payment of the Commission ............................................ 30

iii. Where no obligation to pay for a service exists, quantum meruit does not apply ............................................ 32

iv. There must be restitution of the payments made in error ............................................ 33

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TABLE OF CONTENTS

RESPONDENT SYLVAN ADAMS’ FACTUM Page

v. Only restitution of the payments made by the cardholders is warranted ............................................ 35

vi. The trial judge properly exercised his discretion not to refuse restitution ............................................ 36

PART IV – SUBMISSIONS CONCERNING COSTS ............................................ 40

PART V – ORDER SOUGHT ............................................ 40

PART VI – ALPHABETICAL TABLE OF AUTHORITIES ............................................ 41

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Respondent Sylvan Adams’ Factum Overview and Statement of Facts

RESPONDENT SYLVAN ADAMS’ FACTUM

PART I – OVERVIEW AND STATEMENT OF FACTS1 A. OVERVIEW

1. To succeed in this appeal, Amex must convince this Court not only that banks should be immune

from provincial consumer legislation and banks’ clients limited to the complaint mechanisms

provided for in the Bank Act2 and the Financial Consumer Agency of Canada Act3 for any

subject-matter covered by those statutes, but that the fact-driven analysis and conclusions of the

trial judge, confirmed by the Court of Appeal, on a matter of pure civil law (reception of a thing

not due), should be overturned.

2. For the reasons set out below, Amex should not succeed in either of these arguments, much less

in both of them.

B. FACTS

3. The Respondent refers this Court to the statement of facts set out at paragraphs 6 to 24 of the

judgment rendered by Gascon J., as he then was (the “Trial Judgment”),4 as well as

paragraphs 6 to 21 of the Court of Appeal’s judgment (the “Court of Appeal Judgment”),5 both

of which provide a comprehensive review of the facts based on the evidence adduced at trial.

4. In addition, the Respondent notes the following:

(a) For all of its cards, “the relationship between Amex and its cardholders was governed by an

agreement, the terms of which Amex set and modified from time to time”;6

1 Since the Appellant Amex Bank of Canada (“Amex”) has incorporated by reference much of the factum that it

jointly filed with the Appellants Bank of Montreal, Citibank of Canada, National Bank of Canada and Toronto-Dominion Bank (together, the “Banks”) in Bank of Montreal et als. v. Réal Marcotte et al., S.C.C. No. 35009 (“Marcotte (Banks)”), reference will be made here to both factums. The factum in this case will be referred to as “Amex’s Factum” and the Banks’ factum in Marcotte (Banks) will be referred to as the “Banks’ Joint Factum”.

2 S.C. 1991, c. 46 (the “Bank Act”), Sylvan Adams’ Book of Authorities, (“SABA”), Vol. I, Tab 1.1. 3 S.C. 2001, c. 9 (the “FCAC Act”), SABA, Vol. I, Tab 7. 4 Joint Record, Vol. 1, pp. 5-10. 5 Joint Record, Vol. 2, pp. 4-21. 6 Trial Judgment, para. 12, Joint Record, Vol. 1, p. 6 [Emphasis added]. See also: Amex’s cardholder

agreements for the 1990-2003 period, Exhibit P-1, Joint Record, Vol. 8, pp. 1-247, and Vol. 9, pp. 1-206.

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(b) The exchange rate applied to foreign currency conversion does not, as Amex pleads,

include “as a component, a foreign currency conversion charge.”7 Rather, the conversion

commission (the “Commission”) is a distinct charge added during the conversion process,

as described at trial by Amex’s representative, Johanne Ghali:

[…] the cardmember would purchase that good or service at the foreign merchant, and the merchant would accept the card. […] The merchant would then submit the charge to American Express in the local market and that charge would be captured by American Express, by our global capture systems. […]

That charge would be then recognized by the BIN number or the account range of the card to be a Canadian issued card at a foreign location. And, as a result, the appropriate financial capture system within our global network would convert the charge at the rate applicable on the day. The conversion commission would be applied. The charge would further be converted to Canadian dollars.8 [Emphasis added]

In other words, the Commission is applied after the charge is converted from the foreign

currency to US funds. The total charge is then converted to Canadian dollars and appears

on the cardholder’s monthly statement as a combined amount.9 As admitted by Ms. Ghali,

“the cardmember doesn’t see the […] conversion commission on the statement”;10

(c) Furthermore, the trial judge did not, as alleged by Amex, “acknowledge that the foreign

currency conversion charge is a component of the customer’s exchange rate.”11 His

appreciation of the evidence led him to the opposite conclusion:

[94] For its part, […] [Amex] pleads that the Commission is no more than a component of the foreign exchange rate it charges to its customers.

[…]

[99] The Court considers that Amex is wrong.

[…]

[107] As explained by Mrs. Ghali, what she calls the “mark-up” is applied and added only after the conversion of the foreign currency to US dollars. She describes the “mark-up” that is so added as being the “foreign currency commission.”

7 Amex’s Factum, para. 16, p. 5. 8 Testimony of Johanne Ghali, Joint Record, Vol. 5, pp. 86-87. 9 Testimony of Johanne Ghali, Joint Record, Vol. 5, p. 87. 10 Testimony of Johanne Ghali, Joint Record, Vol. 5, p. 90. 11 Amex’s Factum, para. 16, pp. 5-6.

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[108] Thus, this foreign exchange conversion process, as explained to this Court, involves two separate and distinct steps. First, the establishing of the daily trading or exchange rate; second, the addition of a “mark-up” or “foreign currency commission”. The latter is added to the former. It remains distinct. It is treated separately. It hardly appears to be a component of the first step.12 [Emphasis added]

(d) The Financial Consumer Agency of Canada (the “FCAC”) also found that the “customer’s

exchange rate” was made up of two distinct components: the “corporate reference rate”

(i.e. the actual exchange rate applied by Amex) and the Commission. It also concluded that

the Commission was a “non-interest charge” that needed to be specifically disclosed to

consumers in Amex’s cardholder agreements;13

(e) While Amex acknowledges that between 1990 and 1993 it disclosed the Commission in its

cardholder agreements, and that it removed that language in 1993,14 it does not refer to the

trial judge’s assessment of this behaviour:

[176] Therefore, as of March 1, 1993, Amex’s cardholder agreements no longer referred to any percentage, commission or adjustment. Yet, Amex continued to charge the Commission as it had done in the past. The Commission percentages were indeed raised after August 1999 for various card products.

[…]

[177] After having specifically referred, prior to March 1st, 1993, to the fact that it was adding a 1% percentage to the converted amount, Amex advised its cardholders that, on March 1st, 1993, it was changing the wording of the clause. It then removed the reference to any percentage or commission, without drawing the attention of the cardholders to the reason for the change.

[…]

[180] Amex offered no explanation for the removal of the reference to the percentage adjustment or commission in March 1993.

[181] One thing is clear though. The removal was not accidental. It was deliberate and conscientious. At best, it certainly did not enhance the clarity of the foreign currency transaction charges for the average consumer. At worst, one can infer that it was simply meant to conceal the commission.

[182] From that standpoint, Amex’s notices of January 1993 and its subsequent cardholders’ agreements were misleading. […]15 [Emphasis added]

12 Trial Judgment, paras. 94-109, Joint Record, Vol. 1, pp. 21-23. 13 Exhibit P-29, Joint Record, Vol. 12, pp. 213-227; Exhibit P-30, Joint Record, Vol. 12, pp. 228-237. 14 Amex’s Factum, para. 26, p. 9. 15 Trial Judgment, paras. 17, 177 and 180-182, Joint Record, Vol. 1, pp. 8 and 31. See also: Court of Appeal

Judgment, para. 12, Joint Record, Vol. 2, p. 6.

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Respondent Sylvan Adams’ Factum Questions in Issue

PART II – QUESTIONS IN ISSUE

5. There are three questions in issue in this appeal:

(a) Are ss. 12, 219 and 272 of the Consumer Protection Act16 constitutionally inapplicable in

respect of bank-issued credit and charge cards by reason of the doctrine of

interjurisdictional immunity?

This Court should answer ‘no’ to this constitutional question for the reasons set

out below.

(b) Are ss. 12, 219 and 272 of the C.P.A. constitutionally inoperative in respect of bank-issued

credit and charge cards by reason of the doctrine of federal paramountcy?

This Court should answer ‘no’ to this constitutional question for the reasons set

out below.

(c) Are the plaintiff and the class entitled to restitution under the Civil Code of Quebec17?

Respondent submits that this question should be framed as follows: Was the

Commission charged by Amex due under the relevant cardholder agreements, and if

not, are the class members entitled to restitution?

For the reasons set out below, this Court should confirm the judgments of the

courts below that the Commission was charged without right by Amex and that

it should therefore be returned to the class members.

----------

16 C.Q.L.R., c. P-40.1 (the “C.P.A.”), SABA, Vol. I, Tab 4, pp. 31-34 and 36-38. 17 S.Q. 1991, c. 64 (the “C.C.Q.”), SABA, Vol. I, Tab 2.1.

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Respondent Sylvan Adams’ Factum Argument

PART III - ARGUMENT

A. SECTIONS 12, 219 AND 272 OF THE C.P.A. ARE NOT CONSTITUTIONALLY INAPPLICABLE TO

BANK-ISSUED CREDIT AND CHARGE CARDS BY REASON OF THE DOCTRINE OF

INTERJURISDICTIONAL IMMUNITY

6. Reduced to its simplest expression, Amex’s position is that prohibiting banks from charging fees

“unless the amounts are indicated precisely in their contracts” would “acutely impair” the core of

Parliament’s banking power.18 This argument – identical to the one put forward in the courts

below – was entirely rejected by both the Superior Court and the Court of Appeal.19

7. Amex has failed to make any demonstration of how the C.P.A. provisions at issue in this case

impair, let alone affect, the core of banking. Yet Amex asserts that the “scale of intrusion” is

“massive” and the consequences on Canada’s banking system are nothing short of destructive;20

Amex goes so far as to invoke the specter of the 2008 global financial crisis.21 If the banks indeed

faced a threat on this scale, one would expect at least one example, if not many, showing how

simply having to advise consumers that they are being charged a fee (and being forced to give it

back if the bank does not do so) would “eviscerate”, “stifle” or imperil the “unity and integrity of

the national banking system that Canada has enjoyed since Confederation.”22

8. None has been provided. For these reasons, Amex’s arguments must be dismissed.

i. The provisions at issue in this case

9. The only provisions of the C.P.A. at issue in this case are ss. 12, 219 and 272, which read:

12. No costs may be claimed from a consumer unless the amount thereof is precisely indicated in the contract.

12. Aucuns frais ne peuvent être réclamés d'un consommateur, à moins que le contrat n'en mentionne de façon précise le montant.

219. No merchant, manufacturer or advertiser may, by any means whatever, make false or misleading representations to a consumer.

219. Aucun commerçant, fabricant ou publicitaire ne peut, par quelque moyen que ce soit, faire une représentation fausse ou trompeuse à un consommateur.

18 Amex’s Factum, para. 41, p. 15. 19 Trial Judgment, paras. 309-338, Joint Record, Vol. 1, pp. 47-50; Court of Appeal Judgment, para. 33,

Joint Record, Vol. 2, p. 14. 20 Banks’ Joint Factum, paras. 66-67, pp. 25-26. 21 Banks’ Joint Factum, para. 4, pp. 2-3. 22 Banks’ Joint Factum, para. 3, p. 2; Amex’s Factum, para. 1, p. 1.

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272. If the merchant or the manufacturer fails to fulfil an obligation imposed on him by this Act, by the regulations or by a voluntary undertaking made under section 314 or whose application has been extended by an order under section 315.1, the consumer may demand, as the case may be, subject to the other recourses provided by this Act,

(a) the specific performance of the obligation;

(b) the authorization to execute it at the merchant's or manufacturer's expense;

(c) that his obligations be reduced;

(d) that the contract be rescinded;

(e) that the contract be set aside; or

(f) that the contract be annulled,

without prejudice to his claim in damages, in all cases. He may also claim punitive damages.

272. Si le commerçant ou le fabricant manque à une obligation que lui impose la présente loi, un règlement ou un engagement volontaire souscrit en vertu de l'article 314 ou dont l'application a été étendue par un décret pris en vertu de l'article 315.1, le consommateur, sous réserve des autres recours prévus par la présente loi, peut demander, selon le cas:

a) l'exécution de l'obligation;

b) l'autorisation de la faire exécuter aux frais du commerçant ou du fabricant;

c) la réduction de son obligation;

d) la résiliation du contrat;

e) la résolution du contrat; ou

f) la nullité du contrat,

sans préjudice de sa demande en dommages-intérêts dans tous les cas. Il peut également demander des dommages-intérêts punitifs.

10. As noted by the Court of Appeal, contrary to Marcotte (Banks), “this case does not involve the

detailed requirements of the CPA relating to credit costs, credit rate and payment period”.23

Rather, “[t]he issue here is essentially about the consequences of failing to disclose to the other

contracting party a relevant piece of information.”24 Accordingly, even if this Court were to

accept that the provisions at issue in Marcotte (Banks) fail the interjurisdictional immunity test,

an independent analysis would need to be performed of the provisions at issue in this case.

ii. The test for interjurisdictional immunity

11. As has been articulated by this Court multiple times in recent years, the doctrine of

interjurisdictional immunity is only triggered if a two-pronged test is met:

(a) The provincial law trenches on a protected core of a federal competence; and

23 Court of Appeal Judgment, para. 29, Joint Record, Vol. 2, p. 13 [Italics in the original]. 24 Court of Appeal Judgment, para. 5, Joint Record, Vol. 2, p. 4.

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(b) The provincial law’s “effect on the exercise of the protected federal power” must be

“sufficiently serious to invoke the doctrine of interjurisdictional immunity.”25

12. As Amex itself acknowledges, this doctrine is now one of “limited application”.26

iii. The provisions at issue in this case do not impair core banking

13. The Banks devote much of their factum in Marcotte (Banks) to addressing whether the issuance

of credit or charge cards or the application of foreign exchange rates to transactions made with

credit or charge cards constitute core banking.27 The answer to the Banks’ arguments on these

points are well set out in the factum filed by Messrs. Marcotte and Laparé in Marcotte (Banks), at

paragraphs 61 to 67, and Respondent adopts their reasoning as his own.

14. That being said, even if the trial judge erred in failing to find that lending through credit and

charge cards, or providing foreign exchange services, is core banking, which is denied, it is an

error without consequence because the provisions of the C.P.A. at issue in this case do not fail the

second branch of the interjurisdictional immunity test: they do not impair core banking.

15. This is true for the simple fact that, as this Court has stated numerous times, “rather than just

‘affect’ the core, the impugned legislation must ‘impair’ it for interjurisdictional immunity to

apply: ‘the former does not imply any adverse consequence whereas the latter does’.”28

16. The burden to show such impairment was Amex’s,29 and it failed to discharge it. The following

findings of fact by the trial judge make it evident why ss. 12 and 219 of the C.P.A. – which

merely require disclosure of fees and charges in Amex’s cardholder agreements without

purporting to regulate which fees and charges may be imposed – do not impair core banking:

(a) “Amex charged the Commission in the same manner from 1990 until 2003, and even

afterwards, regardless of whether it disclosed its existence or not”;30

25 Marine Services International Ltd. v. Ryan Estate, 2013 SCC 44 (“Ryan Estate”) [Italics in the original],

SABA, Vol. II, Tab 41, p. 68, para. 54. 26 Banks’ Joint Factum, para. 36, p. 14. 27 Banks’ Joint Factum, paras. 38-59, pp. 15-23. 28 Ryan Estate, SABA, Vol. II, Tab 41, pp. 68-69, paras. 56-57, citing Canadian Western Bank v. Alberta,

[2007] 2 S.C.R. 3 (“Canadian Western Bank”), SABA, Vol. I, Tab 27, pp. 280-281, para. 48. 29 Trial Judgment, para. 325, Joint Record, Vol. 1, p. 49. 30 Trial Judgment, para. 326, Joint Record, Vol. 1, p. 49.

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(b) “Amex has also been disclosing the existence of the Commission since ordered to do so by

the FCAC in 2002”;31 and

(c) “Similarly to what was put in evidence in the Marcotte-Banques case, the documentary

evidence filed in this record contained numerous other examples of Amex’s capacity to

adapt its alleged national business model to the particular requirements of a given province,

including Quebec.”32

17. As this Court recently noted in Ryan Estate, evidence of compliance with a provincial regulatory

scheme is a clear demonstration that a federal power is not impaired.33 It is no surprise, then, that

the trial judge concluded: “It is therefore obvious that disclosure of the Commission has not in

fact impaired or even affected Amex in any of its alleged banking activities, let alone any of its

core functions.”34

18. As for s. 272 of the C.P.A., which is a remedial provision, Amex argues that its application would

“acutely impair” core banking because it would “expose banks to statutory remedies such as

contractual nullity, rescission, restitution, and compensatory and punitive damages.”35

19. The only remedy at issue in this case is that found at s. 272(c).36 It allows for the reduction of an

obligation and Amex provided no evidence that it impairs a core banking function. Furthermore,

the remedies found in s. 272 are otherwise generally available under both the common and civil

law regimes. As such, s. 272 of the C.P.A. no more impairs banks than the equivalent provisions

of the C.C.Q.,37 the application of which Amex does not contest.38

31 Trial Judgment, para. 326, Joint Record, Vol. 1, p. 49. 32 Trial Judgment, para. 336, Joint Record, Vol. 1, p. 50 [Emphasis in the original]. 33 Ryan Estate, SABA, Vol. II, Tab 41, p. 71, para. 63. 34 Trial Judgment, para. 327, Joint Record, Vol. 1, p. 49. 35 Amex’s Factum, para. 41, p. 15. 36 Trial Judgment, para. 231, Joint Record, Vol. 1, p. 37. 37 See: C.C.Q., arts. 1416 (contractual nullity), 1604 (resolution and resiliation of contracts), 1607

(compensatory damages) and 1699 (restitution of prestations), SABA, Vol. I, Tab 2.1, pp. 10, 18-19, 20. Although punitive damages are not usually available under Quebec civil law, they are available in the common law provinces, including in contractual cases, and as such are a common remedy in Canadian law. See: Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595, SABA, Vol. II, Tab 58, pp. 274-276, para. 78.

38 Banks’ Joint Factum, para. 94, p. 35.

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20. Finally, this Court reiterated in Ryan Estate that the mere fact that there are two laws regulating

the same area – and providing different remedies – is not sufficient for the doctrine of

interjurisdictional immunity to apply.39

iv. Where no impairment exists with the provisions at issue, there is no need to consider potential impairments

21. Amex argues that it does not have to demonstrate that the provisions at issue actually impair core

banking so long as it can point to the potentially impairing effect of provisions found in other

chapters of the C.P.A.40 Amex’s position amounts to saying that if any provision of the C.P.A.

could theoretically impair a bank’s core functions, then no provision of the C.P.A. may apply

to it. This is wrong.

22. While it is true that this Court has considered theoretical impairments in some instances, it did so

as further support for the conclusion that the relevant provisions impaired the federal

undertaking, not the other way around. An examination of the actual provisions at issue has

always taken place, and is always at the heart of the analysis.

23. For instance, in Bell Canada,41 which is relied on by Amex in support of this point,42 Beetz J.

concluded that some of the provisions of the provincial workplace safety legislation at issue in

that case triggered the application of the interjurisdictional immunity doctrine. The fact that other

provisions of the same statute were also likely to affect Bell Canada was only an “additional

reason for regarding it as inapplicable to those undertakings.”43

24. However, Beetz J. also confirmed that although provincial workplace safety provisions were

inapplicable to a federal undertaking, the compensatory provisions of the same statute continued

to apply as they did not affect the core of the federal power.44 Accordingly, nothing in this

Court’s jurisprudence would prevent it from finding that ss. 12, 219 and 272 of the C.P.A. remain

applicable to banks even if some other provisions of the Act are inapplicable.

39 Ryan Estate, SABA, Vol. II, Tab 41, p. 71, para. 62. 40 Banks’ Joint Factum, para. 61, p. 24. 41 Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), [1988] 1 S.C.R. 749

(“Bell Canada”), SABA, Vol. I, Tab 21. 42 Banks’ Joint Factum, footnote 92, p. 24. 43 Bell Canada, SABA, Vol. I, Tab 21, p. 214. 44 Bell Canada, SABA, Vol. I, Tab 21, pp. 205-211. See also: Alltrans Express Ltd. v. British Columbia

(Workers’ Compensation Board), [1988] 1 S.C.R. 897, SABA, Vol. I, Tab 11, pp. 85-86, the companion case to Bell Canada where that particular conclusion was applied.

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v. The C.P.A. as a whole does not impair core banking

25. Rather than demonstrate how ss. 12, 219 or 272 of the C.P.A. actually impair its core banking

functions, Amex argues instead that a “jurisdictional nightmare” would result from “applying the

CPA to bank-issued credit cards” because this “would submit the core of Parliament’s banking

power and its unified regulatory authority over the national banking system to comprehensive

provincial regulatory oversight and control.”45

26. Amex cites this Court’s judgment in COPA as its support for this proposition.46 However, Amex

overlooks the fundamental differences between the field of aeronautics, which involves the

creation of geographical enclaves under federal jurisdiction,47 with that of banking. Federally-

chartered banks have always had to comply with provincial rules on all manner of subjects that

relate to their everyday activities, such as deposits, loans, sureties, personal securities and

hypothecs, as well as more general common law and civil law principles governing joint and

several liability, solidarity, notice periods, etc. This reflects and is a consequence of Canada’s

constitutional structure.48

27. As this Court held in Canadian Western Bank:

[…] The appellants cannot plausibly argue that banks are immune from provincial laws of general application in relation to “any” financial service, as this would not only render inapplicable elements of the Insurance Act but potentially render inapplicable provincial laws relating to mortgages, securities and many other ‘services’ as well.49 [Emphasis added]

28. Moreover, as this Court has previously ruled, provincial laws can be applied to banks even when

they impose strict constraints on their actions. For instance, in Houle v. Canadian National

45 Banks’ Joint Factum, para. 64, p. 25. 46 Quebec (Attorney General) v. Canadian Owners and Pilots Association, [2010] 2 S.C.R. 536 (“COPA”),

SABA, Vol. II, Tab 50. 47 As McLachlin C.J. noted in COPA, SABA, Vol. II, Tab 50, p. 167, para. 1: “Aircraft must take off and

land. For this they need soil or water. The soil or water they use is not available for other purposes.” 48 Reference re the Securities Act, [2011] 3 S.C.R. 837 (“Re Securities Act”), SABA, Vol. II, Tab 54,

pp. 218-219, paras. 6-9 and pp. 220-224, paras. 54-62. 49 Canadian Western Bank v. Alberta, [2007] 2 S.C.R. 3, SABA, Vol. I, Tab 27, pp. 282-283, para. 65.

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Bank,50 released roughly nine months after this Court’s decision in Bank of Montreal v. Hall,51

it was held that, despite a bank’s contractual right to recall a loan on demand and to realize on its

Bank Act security without notice – undoubtedly core banking functions – it was prevented from

doing so by Quebec civil law principles pertaining to good faith and abuse of right.

29. The C.P.A. has been in force since 1978 and, as pointed out by the trial judge,52 there are

numerous decisions where it has been applied to banks without a resulting demise of our national

banking system.53 In fact, all that has happened in this case is that Amex has been ordered to return

$9,561,464 to members of the Primary Group; money that it took from consumers without right.54

Amex provides no explanation for how this could be considered impairment of its core functions.

30. Amex’s arguments must also be viewed in light of the fact that:

[331] […] [f]rom 1997 to 2000, namely during four years and with respect to no less than eight revisions of its cardholders’ agreements, Amex included in its agreements mandatory clauses of forfeiture of the benefit of the term, as required to applicable provisions of the CPA. The clauses even invited the consumers to contact the [Office de la protection du consommateur] if need be!55 [Citations omitted] [Emphasis added]

31. For instance, Amex’s 1998 American Express Air Miles Credit Card cardholder agreement had a

section entitled “For Quebec Residents Only”, which stated, in part:

It is in the consumer’s interest to refer to sections 104 to 110 of the Consumer Protection Act (R.S.Q., c. P-40.1) as well as to section 69 of the General

50 Houle v. Canadian National Bank, [1990] 3 S.C.R. 122, SABA, Vol. II, Tab 35. L’Heureux-Dubé J. notes

how the theory of abuse of contractual right “inserts itself into today’s trend towards a just and fair approach to rights and obligations (by way of example of this trend: consumer protection legislation […])” [Emphasis added], at Vol. II, Tab, 35, p. 16.

51 Bank of Montreal v. Hall, [1990] 1 S.C.R. 121, SABA, Vol. I, Tab 14. 52 Judgment of the Superior Court in Marcotte (Banks), paras. 765-773, Joint Record, Vol. 1, pp. 186-187. 53 See for example: Procureur général du Québec v. Banque de Nouvelle-Écosse, [1986] R.J.Q. 1546 (C.A.),

SABA, Vol. II, Tab 49; Boissonneault v. Banque de Montréal, [1988] R.J.Q. 2622 (C.A.), SABA, Vol. I, Tab 23; Gravino v. Banque de Montréal, J.E. 99-724 (S.C.Q.), SABA, Vol. I, Tab 33; Banque de Montréal v. Nadon, [1990] R.J.Q. 880 (C.Q.), SABA, Vol. I, Tab 16; Banque Royale du Canada v. Chenier, J.E. 97-1855 (C.Q.), SABA, Vol. I, Tab 19; Ayotte v. Banque Nationale du Canada, December 16, 2002, C.Q. 500-02-066454-011, SABA, Vol. I, Tab 13; Banque Nationale du Canada v. Kaziberdov, [2007] R.J.Q. 1068 (C.Q.), SABA, Vol. I, Tab 17; Nadeau v. Banque de Montréal, EYB 2008-146400 (C.Q.), SABA, Vol. II, Tab 45.

54 Trial Judgment, para. 496, Joint Record, Vol. 1, p. 72. 55 Trial Judgment, para. 331, Joint Record, Vol. 1, p. 49.

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Regulation made under the Act, and, where necessary, to communicate with the Office de la protection du consommateur.56 [Emphasis added]

32. Amex has pointed to no palpable or overriding error of fact or error of law that would warrant

reversing the decisions below on the issue of interjurisdictional immunity. The findings and

conclusions of those courts must therefore be affirmed by this Court.

B. SECTIONS 12, 219 AND 272 OF THE C.P.A. ARE NOT CONSTITUTIONALLY INOPERATIVE IN

RESPECT OF BANK-ISSUED CREDIT AND CHARGE CARDS BY REASON OF THE DOCTRINE OF

FEDERAL PARAMOUNTCY

33. As this Court has stated numerous times, “[f]ederal paramountcy may […] arise from either the

impossibility of dual compliance or the frustration of a federal purpose.”57

34. The first test – actual conflict in operation – is not at issue here. Amex advances no argument in

support of an operational conflict and therefore accepts that none exists. Instead, Amex’s position

rests on the second branch of the test: that the application of ss. 12, 219 and 272 of the C.P.A. to

bank-issued credit and charge cards would frustrate Parliament’s intention to have a “federal

scheme for regulating the national banking system”.58

35. The majority of Amex’s arguments in this regard are set out in the Banks’ Joint Factum.

Substantive responses to these arguments can be found in Messrs. Marcotte and Laparé’s factum

in Marcotte (Banks), at paragraphs 78-117, which Respondent adopts as his own. Additionally,

Respondent sets out below its responses to the specific issues that arise in this case.

56 Exhibit P-1, Joint Record, Vol. 8, p. 65. See also: Exhibit P-1, Joint Record, Vol. 8, p. 60, where the

English version contains the choice of language clause imposed by the Charter of the French Language, C.Q.L.R., c. C-11.

57 COPA, SABA, Vol. II, Tab 50, p. 170, para. 64. 58 Amex’s Factum, paras. 46-47, p. 16.

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i. The frustration of Parliament’s purpose test

36. The frustration of Parliament’s purpose test governs cases where “imposing an obligation to

comply with federal legislation would in effect frustrate the purpose of a federal law even though

it did not entail a direct violation.”59

37. As this Court held in Rothmans, “[t]his concern about frustration of Parliament’s purpose may

find its roots” in the following statement of Dickson J., as he then was, in Multiple Access:60

[…] there is no true repugnancy in the case of merely duplicative provisions since it does not matter which statute is applied; the legislative purpose of Parliament will be fulfilled regardless of which statute is invoked by a remedy-seeker; application of the provincial law will not displace the legislative purpose of Parliament.61 [Emphasis added]

38. Moreover, the mere fact that Parliament has legislated in respect to a subject matter does not

create a presumption of incompatibility, as the occupied field theory has long been discarded in

Canadian law.62 As this Court recently stated in Ryan Estate:

[…] Courts must not forget the fundamental rule of constitutional interpretation: “[when] a federal statute can be properly interpreted so as not to interfere with a provincial statute, such an interpretation is to be applied in preference to another applicable construction which would bring about a conflict between two statutes”. The “standard for invalidating provincial legislation on the basis of federal purpose is high; permissive federal legislation, without more, will not establish that a federal purpose is frustrated when provincial legislation restricts the scope of the federal permission.”63 [Citations omitted] [Emphasis added]

39. It was Amex’s burden to prove that the application of the provisions at issue in this case would

frustrate Parliament’s purpose. As this Court wrote in COPA: “To do so, it must first establish the

purpose of the relevant federal statute, and then prove that the provincial legislation is

incompatible with this purpose.”64

59 Canadian Western Bank, SABA, Vol. I, Tab 27, pp. 285-286, para. 73. 60 Rothmans, Benson & Hedges Inc. v. Saskatchewan, [2005] 1 S.C.R. 188 (“Rothmans”), SABA, Vol. II,

Tab 56, pp. 253-254, para. 13. 61 Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161 (“Multiple Access”), SABA, Vol. II, Tab 44,

p. 97. 62 Canadian Western Bank, SABA, Vol. I, Tab 27, p. 286, para. 74. 63 Ryan Estate, SABA, Vol. II, Tab 41, pp. 74-75, para. 69. 64 COPA, SABA, Vol. II, Tab 50, p. 171, para. 66.

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ii. The frustration of Parliament’s purpose test does not apply to duplicative provisions

40. This Court has held that “the mere existence of a duplication of norms at the federal and

provincial levels does not in itself constitute a degree of incompatibility capable of triggering the

doctrine” of paramountcy.65 Rather, duplicative laws are in fact the “ultimate in harmony” and

cannot, by definition, frustrate Parliament’s purpose.66

41. Amex argues that “overlaying the cost of borrowing disclosure rules of thirteen provinces and

territories and the oversight of provincial and territorial regulators onto the Federal scheme for

bank-issued credit cards would confuse consumers and destroy the intended uniformity of the

national banking system.”67

42. Amex does not explain how this would occur and provided no evidence of it at trial.

43. More importantly, Amex is not framing the issue properly. The question that must be answered

by this Court is not whether all the provincial cost of borrowing disclosure rules in force across

Canada are rendered inoperative by s. 452 of the Bank Act and the Cost of Borrowing

Regulations, but whether the application of ss. 12, 219 and 272 of the C.P.A. to bank-issued

credit cards frustrates Parliament’s purpose in enacting the federal legislation.

44. Amex admits that the purpose of both the federal and provincial provisions at issue here is the

protection of consumers.68 Moreover, the trial judge found that said provisions are duplicative:

[341] With respect to Section 12 CPA, compliance with it is achieved by simply indicating the existence of the Commission at the rate that applies in the cardholder agreement. This obligation is virtually identical to that which exists under Section 452(2)(c) of the Bank Act and Sections 10(1)(c) and 12(1) of the Cost of Borrowing Regulations of 2001.

[342] Complying with both brings no incompatibility between the two regimes. They each require in essence the same information to be disclosed.

65 Canadian Western Bank, SABA, Vol. I, Tab 27, p. 285, para. 72. See also: Multiple Access, SABA,

Vol. II, Tab 44, p. 97. 66 Multiple Access, SABA, Vol. II, Tab 44, p. 95. 67 Banks’ Joint Factum, para. 78, p. 30. 68 Banks’ Joint Factum, paras. 9-12, pp. 4-6; Amex’s Factum, paras. 17-20, pp. 6-8.

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[…]

[347] Likewise, as there are no express provisions in the federal legislation prohibiting banks from making false and misleading statements in contractual documentation [such as s. 219 of the C.P.A.], it cannot seriously be argued that prohibiting Amex from doing so would frustrate any Parliament’s purpose. A similar reasoning applies with respect to civil recourses such as those contemplated under Section 272 CPA.69

45. The Court of Appeal confirmed these findings, concluding that the C.P.A. provisions at issue in

this case, which “does not involve the detailed requirements of the CPA relating to credit costs,

credit rate and payment period at issue” in Marcotte (Banks), did not frustrate Parliament’s purpose.70

46. Corresponding considerations led this Court to reject the application of the paramountcy doctrine

in Chatterjee with respect to Ontario’s Remedies for Organized Crime and Other Unlawful

Activities Act, 2001, where it had been argued that the provincial legislation was rendered

inoperative by similar forfeiture provisions found in the Criminal Code.71

47. The trial judge’s conclusion in this regard is further supported by the fact that s. 452 of the

Bank Act and ss. 10 and 12 of the Cost of Borrowing (Banks) Regulations72 were the basis for the

FCAC’s conclusion that the Commission was a “non-interest charge” that had to be disclosed to

consumers.73 Accordingly, both the C.P.A. and the Bank Act required disclosure of the Commission

by Amex, and Amex has been complying with both legislative schemes since 2003.74

48. In this respect, the present case is similar to Canadian Western Bank, where this Court held that

the fact that “since 2000, the banks have been promoting insurance in Alberta while complying

with both the federal Bank Act and the provincial Insurance Act” was evidence that there was no

incompatibility between the two regimes.75

69 Trial Judgment, paras. 341-347, Joint Record, Vol. 1, p. 51. 70 Court of Appeal Judgment, paras. 29-30, Joint Record, Vol. 2, pp. 13-14 [Italics in original]. 71 Chatterjee v. Ontario (Attorney General), [2009] 1 S.C.R. 624 (“Chatterjee”), SABA, Vol. I, Tab 30,

pp. 319-322, paras. 42-52. 72 SOR/2001-101 (the “Cost of Borrowing Regulations”), SABA, Vol. I, Tab 5. Section 10 of the Cost of

Borrowing (Banks) Regulations, SOR/92-320, SABA, Vol. I, Tab 6, p. 49, in force during the 1993-2001 class period, was to the same effect.

73 Exhibit P-29, Joint Record, Vol. 12, pp. 213-227. 74 Trial Judgment, para. 326, Joint Record, Vol. 1, p. 49. 75 Canadian Western Bank, SABA, Vol. I, Tab 27, p. 290, para. 99.

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iii. Cooperative federalism

49. Amex takes issue with the Court of Appeal’s conclusion that the application of the remedies

found in the C.P.A. is appropriate because “we must resort to provincial laws since federal laws

are silent on the subjects. The fault, the right to sue and the appropriateness of the class action

cannot be disputed.”76

50. Amex argues that the principles of “cooperative federalism” require deference in situations where

the federal government has deliberately left “gaps” in its legislative scheme, “[o]therwise, the

provinces could dictate the design of federal schemes, requiring Parliament to expressly override

provincial laws.”77

51. This Court has held that “the fact that a plaintiff may have a choice of remedies does not mean

that the provisions of both levels of government cannot ‘live together’ and operate

concurrently.”78 Elements of differentiation between the federal and provincial schemes are

allowed, so long as no conflict arises. This is clearly the reasoning behind decisions such as

Rothmans,79 Canadian Western Bank80 and Spraytech.81

52. In other words, where “it might be possible to comply with the letter of both laws, but where such

compliance would frustrate the purpose intended by Parliament” the doctrine applies.82 But where

the provincial scheme merely provides for additional (or different, but not incompatible)

restrictions or remedies, its applicability is upheld.83

76 Court of Appeal Judgment, para. 31, Joint Record, Vol. 2, p. 14. On the use of the expression “fault” by

the Court of Appeal, see the section of this factum dealing with reception of a thing not due, infra, paras. 82-84.

77 Banks’ Joint Factum, para. 72, p. 27. 78 Multiple Access, SABA, Vol. II, Tab 44, pp. 96-97. See also: Chatterjee, SABA, Vol. I, Tab 30, pp. 316-

317, para. 3. 79 Rothmans, SABA, Vol. II, Tab 56, pp. 253-254, paras. 12-15 and pp. 255-256, paras. 25-26. 80 Canadian Western Bank, SABA, Vol. I, Tab 27, pp. 285-287, paras. 73-75 and pp. 290-294, paras. 101-

109. 81 114957 Canada ltée (Spraytech, société d’arrosage) v. Hudson (Town), [2001] 2 S.C.R. 241

(“Spraytech”), SABA, Vol. I, Tab 9, pp. 69-70, para. 40. 82 British Columbia (Attorney General) v. Lafarge Canada Inc., [2007] 2 S.C.R. 86 (“Lafarge”), SABA,

Vol. I, Tab 24, pp. 243-244, para. 84. 83 Multiple Access, SABA, Vol. II, Tab 44, pp. 96-97.

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53. As this Court wrote at the end of its reasons in Re Securities Act, “we may appropriately note the

growing practice of resolving the complex governance problems that arise in federations, not by

the bare logic of either/or, but by seeking cooperative solutions that meet the needs of the country

as a whole as well as its constituent parts.”84

54. In fact, the whole idea behind cooperative federalism means keeping two compatible schemes,

not favouring one over the other. As Dickson J. wrote in Multiple Access, any “resulting

‘untidiness’ or ‘diseconomy’ of duplication is the price we pay for a federal system in which

economy ‘often has to be subordinate to […] provincial autonomy’.”85

iv. This Court should reject express extensions of paramountcy by legislative fiat

55. Amex argues that “Parliament intended to subject bank-issued credit cards only to the federal

cost of borrowing disclosure rules and only the FCAC’s regulatory oversight”,86 and that the

“Cost of Borrowing (Banks) Regulations were similarly intended to be the only rules applicable

to bank-issued credit cards.”87 According to Amex, this is evidenced in, among other places, the

new preamble to the Bank Act, which states that it “is in the national interest to provide for clear,

comprehensive, exclusive, national standards applicable to banking products and banking

services offered by banks”.88 Again according to Amex, this amendment places “the issue beyond

any further argument.”89

56. The addition of a new preamble to the Bank Act raises an issue that has remained an open one in

Canadian constitutional law since the development of the second branch of the paramountcy test,

namely: “If the federal Parliament occupied a field of legislation by express words, would that be

effective?”90

84 Re Securities Act, SABA, Vol. II, Tab 54, p. 226, paras. 132-133. 85 Multiple Access, SABA, Vol. II, Tab 44, p. 97. See also: Ryan Estate, SABA, Vol. II, Tab 41, pp. 65-66,

para. 50, in relation to the doctrine of interjurisdictional immunity, but in terms that are equally applicable here; Canadian Western Bank, SABA, Vol. I, Tab 27, p. 285, para. 72.

86 Banks’ Joint Factum, para. 73, p. 28 [Emphasis in original]. 87 Banks’ Joint Factum, para. 82, p. 31. 88 Added by S.C. 2012, c. 19, s. 525, which came into force on June 29, 2012, after the case was heard by the

Court of Appeal but before judgment was issued. 89 Amex’s Factum, para. 47, p. 16. 90 Peter W. Hogg, Constitutional Law of Canada, 5th ed. supplemented (Toronto: Carswell) (“Hogg”),

SABA, Vol. II, Tab 62, p. 345.

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57. Professor Hogg writes that “[i]n principle, the answer to this question should be yes”,91 though he

recognizes that the decision of this Court in Dick v. The Queen is an authority against this

conclusion. In that decision, Beetz J. wrote that “[i]t would not be open to Parliament in my view

to make the Indian Act paramount over provincial laws simply because the Indian Act occupied

the field. Operational conflict would be required to this end.”92

58. Robin Elliot has argued against Hogg’s view, noting:

In my view, it would not be appropriate to accord the status of a distinct ground for finding a conflict to the federal intention to cover the field test, regardless of how that intention is expressed. To take that step would place provincial autonomy in far too vulnerable a position. It would effectively mean that, in areas of functional concurrency, of which there are now many, provincial legislation would only operate for as long as Parliament decided it could.93

59. Respondent submits that this is the correct view. Additionally, it avoids reviving the “occupied

field” theory of paramountcy, as this Court has warned against.94

60. Indeed, accepting the ability of Parliament to assert exclusive power over one of its fields of

jurisdiction, let alone by retroactive legislation,95 would be a direct violation of the principles

which underlie the dual aspect doctrine of our constitution, as well as a backhanded way of

reviving the federal power of disallowance of provincial laws, which has long fallen into disuse.96

91 Hogg, SABA, Vol. II, Tab 62, p. 346. 92 Dick v. The Queen, [1985] 2 S.C.R. 309, SABA, Vol. I, Tab 31, pp. 329-330. 93 Robin Elliot, “Safeguarding Provincial Autonomy from the Supreme Court’s New Federal Paramountcy

Doctrine: A Constructive Role for the Intention to Cover the Field Test?” (2007), 38 S.C.L.R. (2d) 629, SABA, Vol. II, Tab 61, p. 329.

94 Canadian Western Bank, SABA, Vol. I, Tab 27, p. 286, para. 74; Lafarge, SABA, Vol. I, Tab 24, pp. 243-244, para. 84.

95 In Canadian Western Bank, SABA, Vol. I, Tab 27, p. 293, para. 108, this Court refused to “place much weight on the post-enactment activities in Parliament”, as they were a poor indication of Parliament’s original intentions when enacting the provisions of the Bank Act at issue in that case.

96 Constitution Act, 1867, s. 90, SABA, Vol. I, Tab 3, pp. 25-26; Re: Resolution to Amend the Constitution, [1981] 1 S.C.R. 753, SABA, Vol. II, Tab 53, p. 207; The Queen v. Beauregard, [1986] 2 S.C.R. 56, SABA, Vol. II, Tab 57, p. 264. Hogg notes that it was last used in 1943. See: Hogg, SABA, Vol. II, Tab 62, pp. 342-343.

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v. It was not Parliament’s intention to create an exclusive regime for all banking products and services

61. According to Amex, no provisions other than those found in the Bank Act and its regulations

should apply to bank-issued credit cards and no remedy should be available to banks’ clients

except the complaint mechanism administered by the FCAC.97 This position begs the question: if

Parliament’s intention was really to create a complete code for credit cards, then wouldn’t that

also exclude the application of the C.C.Q.? And if so, why stop there? After all, the new preamble

to the Bank Act is not limited to credit cards; it refers to all “banking products and banking

services offered by banks.” Should provincial laws also be rendered inoperative in these areas?

62. The answer to these questions is clearly “no”. Firstly, accepting this theory would effectively

overturn this Court’s decision in Canadian Western Bank, where it held that Parliament’s purpose

in providing for the regulation of insurance issued by banks in the Bank Act was not frustrated by

provincial consumer protection legislation that was applicable to bank-issued insurance.

63. More importantly, it would mean that the entire field of banking is exempt from the application

of provincial laws, even if there is no conflict in operation, as well as from the purview of courts

of general jurisdiction. This would constitute an unprecedented and unilateral extension of the

doctrine of paramountcy, not to mention the gaping holes it would create in the legal

underpinning of banking services, for banks and their clients alike.

64. Yet the Attorney General of Canada, who intervened before the Court of Appeal below, clearly

stated that it was not Parliament’s intention to exempt banking products and services, including

credit and charge cards, from the application of provincial laws of general application:

[28] […] [The Attorney General of Canada] does not dispute that the general principles of tort and contract law applicable in this province under the CCQ remain applicable to the extent that they complement federal legislation and do not distort them. This is of course in accordance with ss. 8.1 and 8.2 of the Interpretation Act, R.S.C. 1985, c. I-21, which formally recognises the duality of our legal traditions.98

97 Banks’ Joint Factum, paras. 75 and 84-90, pp. 28 and 32-34. 98 Court of Appeal Judgment, para. 28, Joint Record, Vol. 2, p. 13.

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65. The C.P.A. is just as compatible with the consumer provisions of the Bank Act and its regulations

as the C.C.Q. rules on contracts are. As noted by the Court of Appeal: “The CPA is a

comprehensive code applicable to all types of contracts entered into by the consumers of this

province. Some of its principles derogate from the general law, as codified in the CCQ, but most

are complementary when not a mere restatement of the general principles.”99

66. Furthermore, as this Court recently stated in Quebec (Attorney General) v. Lacombe, the purpose

of a law is determined by examining a multitude of factors and this examination can lead to a

different characterization of a law than that stated in its preamble.100 As such, it is a mistake to

treat legislative objectives, even when included in a statute, as power-conferring provisions. They

are merely an interpretative tool.101

67. In this case, other, more specific provisions of the Bank Act make it clear that Parliament

accepted that recourses other than a complaint to the FCAC were available to consumers. For

instance, s. 988 of the Bank Act provides as follows:

988. Unless otherwise expressly provided in this Act, a contravention of any provision of this Act or the regulations does not invalidate any contract entered into in contravention of the provision.

988. Sauf disposition contraire expresse de la présente loi, le contrat conclu en contravention d’une disposition de celle-ci ou de ses règlements n’est pas nul pour autant.102

68. As the Act itself does not deal with civil recourses that could result in the nullity of a contract, the

inclusion of s. 988 had to be directed at courts of general jurisdiction seized of proceedings

instituted under provincial law. As such, the availability of civil proceedings for consumers, in

addition to complaints to the FCAC, was clearly envisaged by Parliament.

99 Court of Appeal Judgment, para. 33, Joint Record, Vol. 2, p. 14 [Emphasis added]. 100 Quebec (Attorney General) v. Lacombe, [2010] 2 S.C.R. 453, SABA, Vol. II, Tab 51, pp. 185-186,

paras. 20 and 22. 101 Barrie Public Utilities v. Canadian Cable Television Association, [2003] 1 S.C.R. 476, SABA, Vol. I,

Tab 20, p. 194, para. 37 and pp. 195-196, para. 42. See also: Interpretation Act, R.S.C. 1985, c. I-23, s. 13, SABA, Vol. I, Tab 8, p. 59: “The preamble of an enactment shall be read as a part of the enactment intended to assist in explaining its purport and object” [Emphasis added].

102 Until 2001, this provision was found at s. 598 of the Act.

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69. This interpretation is buttressed by s. 989(3) of the Bank Act, which reads:

989. […]

(3) If a bank or an authorized foreign bank or any director, officer, employee or agent of one does not comply with any applicable consumer provision, the Commissioner or any complainant may, in addition to any other right that that person has, apply to a court for an order directing the bank, authorized foreign bank, director, officer, employee or agent to comply with — or restraining the bank, authorized foreign bank, director, officer, employee or agent from acting in breach of — the consumer provision and, on the application, the court may so order and make any further order it thinks fit.

989. […]

(3) Le commissaire ou un plaignant peut, en plus de tous ses autres droits, demander au tribunal une ordonnance enjoignant à la banque ou à la banque étrangère autorisée ou à ceux de ses administrateurs, dirigeants, employés ou mandataires qui ne respectent pas les dispositions visant les consommateurs applicables de s’y conformer, ou leur interdisant d’y contrevenir; le tribunal peut acquiescer à la demande et rendre toute autre ordonnance qu’il juge indiquée.103 [Emphasis added]

70. Since the Bank Act does not otherwise provide for civil remedies and since the right to specific

performance through injunctive relief is in addition to “other rights”, it follows that Parliament

must have intended that consumers would resort to provincial laws to fill the gaps left by the

federal enactment, so long as those provincial laws were not inconsistent with the Bank Act.

71. Such an interpretation, which preserves the possibility for banks’ clients to institute civil

proceedings against banks before the courts of general jurisdiction, is also consistent with this

Court’s jurisprudence that “ouster of jurisdiction from the provincial superior courts […] requires

clear and explicit statutory wording to this effect”,104 a test that is clearly not met by the Bank Act

and the FCAC Act.

vi. There is no frustration of Parliament’s intention to preserve contracts entered into by banks

72. Amex argues that ss. 12, 219 and 272 of the C.P.A. “would also frustrate the purpose of the Bank

Act by allowing breach of a bank’s statutory disclosure obligations to result in contractual nullity

103 This provision had no equivalent under the 1991 version of the Act. Section 2 of the Bank Act defines

some of the words used in s. 989(3): “Complainant” includes “any other person who, in the discretion of a court, is a proper person to make an application under section 334, 338 or 989” and “court” means, “in the Province of Quebec, the Superior Court of the Province.”, SABA, Vol. I, Tab 1.1, p. 7.3.

104 Ordon Estate v. Grail, [1998] 3 S.C.R. 437, [Emphasis added], SABA, Vol. II, Tab 46, p. 127, para. 46. See also: Canada (Attorney General) v. TeleZone Inc., [2010] 3 S.C.R. 585, SABA, Vol. I, Tab 26, pp. 265-267, paras. 42-46.

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and the cancellation of charges, contrary to the purpose of the federal scheme to preserve

contracts.”105

73. The argument is misleading. Section 988 of the Bank Act only speaks of the nullity of contracts,

not the cancellation of charges. However, Respondent does not seek the nullity of the cardholder

agreements. As for s. 16(a), as will be developed more fully below in the portion of this factum

dealing with reception of a thing not due, it prohibits invalidating an act of a bank “by reason

only” that it is contrary to the Bank Act, which is not the case here.106 The payments which must

be reimbursed by Amex were not only contrary to the Bank Act, but also to the C.P.A., in addition

to being nowhere supported by the explicit and implicit terms of the cardholder agreements.

vii. Severability

74. Amex argues that the Court of Appeal “was wrong to ‘sever’ the CPA by allowing some of its

substantive standards and civil remedies to operate, but precluding oversight by the regulators

charged with overseeing the Act.”107

75. That issue does not arise from the Court of Appeal’s reasons in this case, but instead from obiter

found in its reasons in Marcotte (Banks).108

76. At any rate, Amex’s position is not supported by the case law. It is clearly possible to sever a

portion of a provincial statute so long as it can be disassociated from the rest of the law.109 Amex

has provided no evidence that ss. 12, 219 and 272 are indissociable from other provisions of the

C.P.A.

77. Furthermore, as this Court held in Canadian Western Bank, courts must limit their determination

of operability to the provisions that are at issue in the case before them: “Should an issue arise in

future with respect to a conflict not dealt with here or in the reasons of the courts below, it would,

105 Banks’ Joint Factum, para. 74, p. 28 [Emphasis added]. See also: Amex’s Factum, para. 49, p. 17; Banks’

Joint Factum, paras. 84-91, pp. 32-34. 106 See : infra, paras. 120-124. 107 Banks’ Joint Factum, para. 91, p. 34. 108 Court of Appeal Judgment in Marcotte (Banks), paras. 107-109, Joint Record, Vol. 2, pp. 64-65. The

statement is obiter because the power of the Office de la protection du consommateur to oversee the application of the C.P.A. to banks was not directly at issue in that case.

109 Bell Canada, SABA, Vol. I, Tab 21, pp. 205-211.

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of course, be open to the banks to pursue a paramountcy argument on the basis of the facts as

they may then appear.”110

C. SHOULD AMEX’S CONSTITUTIONAL ARGUMENTS BE DISMISSED BY THIS COURT, THE

RESPONDENT’S C.P.A. CLAIM MUST SUCCEED

78. In the event that Amex’s constitutional arguments are rejected – as the Respondent submits they

should be – the result is that, at least for the Primary Group, the Court of Appeal’s judgment must

stand. This is because Amex is no longer arguing that its cardholder agreements were in

conformity with ss. 12 and 219 of the C.P.A., or that s. 272(c) is not the appropriate remedy for a

breach of those provisions under the circumstances.

D. WAS THE COMMISSION CHARGED BY AMEX DUE UNDER THE RELEVANT CARDHOLDER

AGREEMENTS, AND IF NOT, ARE THE CLASS MEMBERS ENTITLED TO RESTITUTION?

79. The class members’ claim based on reception of a thing not due pursuant to arts. 1491 and 1554

C.C.Q. is made in addition to the Primary Group’s claim under the C.P.A. This claim is advanced

for consumers (i.e. Primary Group members) and individuals who used their credit and charge

cards primarily for business purposes as well as small businesses (i.e. Secondary Group members).

80. Since Amex is not challenging the application of the C.C.Q. to banks or its operability in the face

of federal legislation, this claim is not dependent on the answers this Court will give to the

constitutional questions formulated by the Chief Justice.111

81. The judgment against Amex based on the reception of a thing not due rests on the trial judge’s

findings, confirmed by the Court of Appeal, that, from 1993 to 2003:

(a) The Commission was a fee imposed on cardholders by Amex that was separate from the

exchange rate applied to convert the charges made in a foreign currency;112

(b) The Commission was nowhere disclosed to cardholders by Amex and it did not form part

of the cardholder agreements;113 and

110 Canadian Western Bank, SABA, Vol. I, Tab 27, p. 294, para. 109. 111 Order of the Chief Justice, June 24, 2013, Joint Record, Vol. 3, pp. 164-165. 112 Trial Judgment, Joint Record, paras. 100-154, Vol. 1, pp. 22-28; Court of Appeal Judgment, para. 34,

Joint Record, Vol. 2, p. 15. 113 Trial Judgment, Joint Record, paras. 123-126 and 357-370, Vol. 1, pp. 23-24 and 53-55; Court of Appeal

Judgment, paras. 35-38, Joint Record, Vol. 2, p. 15.

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(c) The Commission should not have been charged to cardholders, who paid it under the

erroneous belief that the totality of the amounts claimed by Amex on their monthly

statements of account were due.114

i. Reception of a thing not due is not grounded on the notion of “fault”

82. As explained by this Court in Willmor Discount, a claim of reception of a thing not due will

succeed when a party establishes: (1) a payment, (2) “no debtor-creditor relations in contract or by

law […] with respect to the payment made”, and (3) an error, namely “for the solvens, […] the belief

that he has to pay.”115

83. Contrary to civil or contractual liability pursuant to arts. 1457 and 1458 of the C.C.Q., no fault,

causal link or prejudice has to be proven to establish reception of a thing not due.116

84. Although the Court of Appeal uses the word “fault” twice in its judgment,117 its reasons, like that

of the trial judge, are grounded on the theory of the reception of a thing not due.118 Amex’s

contention that it was ordered to pay back the Commission on the basis of a “fault” or a “breach”

of the Bank Act and the Cost of Borrowing Regulations is therefore incorrect.119

114 Trial Judgment, Joint Record, paras. 371-378, Vol. 1, pp. 55-56; Court of Appeal Judgment, paras. 39-42,

Joint Record, Vol. 2, p. 16. 115 Willmor Discount Corp. v. Vaudreuil (City), [1994] 2 S.C.R. 210 (“Willmor Discount”), SABA, Vol. II,

Tab 59, pp. 282-283. See also: Agence de développement de réseaux locaux de services de santé et de services sociaux de Laval (Régie régionale de la santé et de services sociaux de Laval) v. 9112-4511 Québec inc. (Orchidée blanche, Centre d’hébergement et de soins de longue durée inc.), J.E. 2006-2343 (S.C.Q.) (aff’d, J.E. 2008-1066 (C.A.Q.)) (“Orchidée blanche”), SABA, Vol. I, Tab 10, p. 76, para. 31 and p. 79, paras. 42-45, citing Jean-Louis Baudouin and Pierre-Gabriel Jobin, with the collaboration of Nathalie Vézina, Les obligations, 6th ed. (Cowansville: Éditions Yvon Blais, 2005) (“Baudouin and Jobin”), No. 560, SABA, Vol. II, Tab 60, p. 288.

116 By contrast, the class action certified in Cassano v. The Toronto-Dominion Bank, 2007 ONCA 781 (CanLII) (leave to appeal denied, March 27, 2008, S.C.C. No. 32424), SABA, Vol. I, Tab 28, although based on similar facts – undisclosed foreign exchange conversion fees – and seeking a similar remedy, was grounded on an alleged contractual breach, not restitution.

117 Court of Appeal Judgment, paras. 31 and 34, Joint Record, Vol. 2, pp. 14-15. 118 Trial Judgment, Joint Record, paras. 371-378, Vol. 1, pp. 55-56; Court of Appeal Judgment, paras. 36-42,

Joint Record, Vol. 2, pp. 15-17. 119 Banks’ Joint Factum, para. 93, pp. 34-35.

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ii. The cardholder agreements did not include an obligation to pay a fee for the conversion of foreign currencies

85. A fundamental principle of civil law is that for money to be owed pursuant to a contract, the

contract must stipulate, either explicitly or implicitly, that the money is indeed due.

Article 1554(1) of the C.C.Q. provides as follows:

1554. Every payment presupposes an obligation; what has been paid where there is no obligation may be recovered.

1554. Tout paiement suppose une obliga-tion: ce qui a été payé sans qu’il existe une obligation est sujet à répétition.120

86. After carefully reviewing the cardholder agreements in force between 1993 and 2003 in light of

the C.C.L.C. and C.C.Q. rules on the interpretation of contracts,121 assessing the evidence led at

trial – including the testimony of Amex’s representative and the FCAC report, decision and

documentation – and considering the applicable laws and usage, the trial judge concluded that:

(a) From 1993 to 2003, “Amex still charged the Commission without any legal right to do

so”;122 and

(b) “[T]he class members have, with respect to the Commission, paid more than what the

agreements stipulated. In other words, they paid the Commission to Amex when they were

not contractually obligated to do so.”123

a. The trial judge’s findings with respect to the interpretation of the cardholder agreements raise pure issues of fact or issues of mixed fact and law

87. Amex argues that the trial judge’s interpretation of the cardholder agreements was a question of

law reviewable on a correctness standard.124 This is wrong.

120 For the pre-1994 period, art. 1140 of the Civil Code of Lower Canada (the “C.C.L.C.”), SABA, Vol. I,

Tab 2, p. 8.2, was to the same effect. 121 Pursuant to ss. 2, 3, and 87 of An Act respecting the implementation of the Civil Code, (the “Transitional

Provisions”), SABA, Vol. I, Tab 1, pp. 1-1.1 and 1.4, the C.C.L.C. rules on the interpretation of contracts apply to the pre-1994 cardholder agreements, whereas the C.C.Q. applies to the agreements in force since then. There are no substantive differences between the rules at issue here, except for art. 1432 of the C.C.Q., SABA, Vol. I, Tab 2.1, p. 13, dealing with contracts of adhesion and consumer contracts, which had no equivalent under the C.C.L.C., but which is made applicable to pre-1994 contracts by s. 81 of the Transitional Provisions, SABA, Vol. I, Tab 1, p. 1.3.

122 Trial Judgment, para. 371, Joint Record, Vol. 1, pp. 55-56. 123 Trial Judgment, para. 374, Joint Record, Vol. 1, p. 56. 124 Amex’s Factum, para. 54, p. 20.

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88. The interpretation of a contract can involve factual as well as legal questions. As such, case law

in Quebec and elsewhere is replete with examples of appeal courts reviewing contractual

interpretation decisions made by trial judges on a fact or mixed fact and law standard.125

89. This is consistent with the principles of contractual interpretation codified at arts. 1425 to 1432 of

the C.C.Q., some of which deal with the text of the contract and others with the facts surrounding

it. It is also consistent with the rules of evidence, notably art. 2864 of the C.C.Q., which allows

proof by testimony to interpret a written contract.

90. The trial judge’s interpretation was not based merely on his reading of the text of the cardholder

agreements, as was the case in the jurisprudence cited by Amex.126 Rather, he explicitly based

himself on the evidence adduced at trial. Amex therefore bore the burden of showing a palpable

and overriding error in his analysis, which it failed to do.127

b. The Commission was a fee or a charge

91. Amex’s argument with regards to the reception of a thing not due is premised on its contention

that the Commission was a component of the exchange rate applied to charges made in foreign

currency and that as a result, the mention of an “exchange rate” in its cardholder agreements was

a sufficient contractual basis for the Commission.128

92. As seen in the “Facts” section above, the trial judge flatly rejected this contention and instead

concluded that the Commission was a separate fee or charge. He summarized his findings in this

regard as follows:

[100] On the balance of probabilities, the evidence in this case suggests that the true nature of the Commission is that of a fee or a charge, namely a “cost” or a “frais”.

125 See for example: Immeubles Régime XV inc. v. Indigo Books & Music Inc., 2012 QCCA 239, SABA,

Vol. II, Tab 36, p. 20, paras. 9-10; F. Picard Recyclage inc. v. Gestion sanitaire M & M inc., 2011 QCCA 2185, SABA, Vol. I, Tab 32, p. 334, para. 7; Petty v. Telus Corp., 2002 BCCA 135, SABA, Vol. II, Tab 47, pp. 132-133, para. 14; MacDougall v. MacDougall, 2005 Can LII 44676 (ON CA), SABA, Vol. II, Tab 39, pp. 36-37, para. 33.

126 Amex’s Factum, para. 54, p. 20. See: Alberta Giftwares Ltd. v. The Queen, [1974] S.C.R. 584; Bell Canada v. The Plan Group (2009), 96 O.R. (3d) 81 (C.A.).

127 Housen v. Nikolaisen, [2005] 1 S.C.R. 235; H.L. v. Canada (Attorney General), [2005] 1 S.C.R. 401. 128 Amex’s Factum, paras. 53-54, pp. 19-20; Banks’ Joint Factum, para. 96, pp. 35-36.

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[101] To so conclude, the Court relies on five considerations:

1) the operation conducted by Amex for the foreign currency conversion;

2) the terms of Amex’s cardholders’ agreements, the disclosures made therein and the different rates of Commission charged depending on the card products;

3) the decision rendered by the FCAC against Amex and the wording of the relevant Sections of the Bank Act and its Cost of Borrowing Regulations;

4) the manner in which Amex’s regulatory body, the FCAC, qualifies the Commission in its public documentation addressed to consumers; and

5) the lack of evidence in support of Amex’s theory that the Commission is no more than a component of the foreign exchange rate.129

93. The FCAC, a specialized body tasked by Parliament to “supervise financial institutions […] to

determine whether the institution […] is in compliance with […] the consumer provisions

applicable to them”,130 came to the same conclusion. It found that the Commission was one of the

“charges for which the person becomes responsible by accepting or using the card” pursuant to

s. 452 of the Bank Act, and a “non-interest charge” pursuant to s. 10(1) of the 2001 version of the

Cost of Borrowing Regulations.131 The documents and brochures published by the FCAC

similarly indicated that “the Commission [is] nothing else but a fee, similar to the miscellaneous

other fees charged by financial institutions on credit cards.”132

94. Amex’s own representative, Johanne Ghali, described the conversion process and the application

of the Commission as two distinct steps each involving a different component, namely the daily

trading rate and a fixed percentage commission.133 This distinction between the exchange rate

and the Commission was reflected clearly in both the pre-1993 and post-2003 cardholder

agreements.134 Although Amex chose, between 1993 and 2003, not to disclose the rate and the

Commission separately anywhere, making them appear as one blended figure, the process for

129 Trial Judgment, paras. 100-101, Joint Record, Vol. 1, p. 22. 130 FCAC Act, s. 3(2), SABA, Vol. I, Tab 7, pp. 56-57. The list of “consumer provisions”, which includes

s. 452 of the Bank Act, SABA, Vol. I, Tab 1.1, pp. 6-7.1 and the Cost of Borrowing Regulations, is provided at s. 2, SABA, Vol. I, Tab 7, pp. 53-56.

131 Trial Judgment, paras. 129-133, Joint Record, Vol. 1, pp. 25-26. See also: Exhibit P-29, Joint Record, Vol. 12, pp. 213-227; Exhibit P-30, Joint Record, Vol. 12, pp. 228-237.

132 Trial Judgment, paras. 135-141, Joint Record, Vol. 1, pp. 26-27. 133 Trial Judgment, paras. 102-108 and 363-365, Joint Record, Vol. 1, pp. 22-23 and 54. 134 Trial Judgment, paras. 110-122, Joint Record, Vol. 1, pp. 23-24.

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applying the exchange rate and the Commission to a charge made in a foreign currency remained

the same throughout.135

95. It is no surprise, then, that the trial judge found that Amex’s argument that the Commission was

part of the exchange rate, and therefore not a fee, lacked evidentiary support. As the trial judge

wrote:

[148] In fact, when Amex argues that the Commission is part of the foreign exchange rate, it says so because it decides itself to include it as part of the all-in rate charged to the customer. In other words, it becomes a component because Amex decides to put it together with the exchange rate.

[149] It is not because Amex puts together separate elements that they are necessarily one component of each other. That way of doing does not change the fact that the Commission remains a distinct cost, separate from the conversion rate that is established by TRS.136

96. As the Court of Appeal noted, “[t]he trial judge’s determination about the nature of the mark-up

(the Commission) is essentially a conclusion of fact or, at best for appellant, a mixed question of fact

and law.” Not only did the Court of Appeal find no palpable and overriding error in the trial judge’s

appreciation of the evidence, it held that the overwhelming evidence supported these findings.137

c. The cardholder agreements made no reference to the Commission

97. Having determined that the Commission was a fee that was distinct from the exchange rate, the

trial judge turned to the cardholder agreements to determine whether or not they contained any

reference to it. In contrast to other fees that were specifically disclosed in the agreements, the trial

judge found that the Commission was not disclosed.138

98. For example, Amex’s 1996 consumer charge card agreement contains the following language:

(a) “Your use of the enclosed Card will be governed by this Agreement”;

135 Trial Judgment, para. 326, Joint Record, Vol. 1, p. 49. 136 Trial Judgment, paras. 148-149, Joint Record, Vol. 1, p. 27. 137 Court of Appeal Judgment, para. 34, Joint Record, Vol. 2, p. 15. 138 Trial Judgment, paras. 110-127 and 357-365, Joint Record, Vol. 1, pp. 23-25 and 53-54. See also: Court of

Appeal Judgment, para. 36, Joint Record, Vol. 2, p. 15.

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(b) Fees and charges, such as “Delinquency Assessments” rates and the fee for dishonoured

cheques, as well as the maximum liability of the cardholder for charges made after a card

has been lost or stolen, are printed in a larger font than the rest of the text, using bold

characters; and

(c) All that is stipulated in regards to “Charges made in foreign countries” is that a “Charge in

a foreign currency […] will be converted into Canadian dollars at the exchange rate

determined by us”.139

99. Contrary to Amex’s argument,140 the ordinary meaning of the terms “exchange rate determined

by us” cannot be understood to include the Commission. As demonstrated above, the conversion

rate and the Commission are two distinct elements.141

100. As the trial judge wrote:

[146] To accept Amex’s argument, one would have to conclude that an exchange rate does not mean the rate at which a currency is exchanged. It should rather mean the rate at which a currency is exchanged, plus whatever Amex wishes to add to that.

[147] This is not acceptable. Notably, considering the wording Amex itself uses in its cardholders’ agreements.142 [Emphasis added]

101. The trial judge was therefore justified in concluding that: “When one looks at Amex’s

cardholders’ agreements for the period 1993 to 2003, it is obvious that no reference to any

Commission exists.”143 To paraphrase this Court’s decision in Richard v. Time Inc., “the general

impression that [Amex’s cardholder agreements was] likely to convey to a credulous and

inexperienced consumer” between 1993 and 2003 was that no fee was charged by Amex for the

conversion of foreign currency charges.144

139 Exhibit P-1, Joint Record, Vol. 8, pp. 42-43. 140 Amex’s Factum, paras. 53-54, pp. 19-20; Banks’ Joint Factum, para. 96, pp. 35-36. 141 Trial Judgment, paras. 359-365, Joint Record, Vol. 1, p. 54. See also: Court of Appeal Judgment, para. 36,

Joint Record, Vol. 2, p. 15. 142 Trial Judgment, paras. 146-147, Joint Record, Vol. 1, p. 27. See also: C.C.Q., art. 1431, SABA, Vol. I,

Tab 2.1, p. 13: “The clauses of a contract cover only what it appears that the parties intended to include, however general the terms used.”

143 Trial Judgment, para. 123, Joint Record, Vol. 1, p. 24. See also: Court of Appeal Judgment, para. 36, Joint Record, Vol. 2, p. 15.

144 Richard v. Time Inc., [2012] 1 S.C.R. 265, SABA, Vol. II, Tab 55, p. 246, para. 78.

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102. If any ambiguity remained in this respect, art. 1432 of the C.C.Q. commanded that it be resolved

against Amex, as was done by the trial judge:145

1432. In case of doubt, a contract is interpreted in favour of the person who contracted the obligation and against the person who stipulated it. In all cases, it is interpreted in favour of the adhering party or the consumer.

1432. Dans le doute, le contrat s'interprète en faveur de celui qui a contracté l’obligation et contre celui qui l’a stipulée. Dans tous les cas, il s’interprète en faveur de l’adhérent ou du consommateur.146

103. As the party that had complete control over the drafting of the cardholder agreements, Amex has

to bear the consequences of having deliberately chosen, in 1993, to remove any reference to the

Commission.147

d. Neither usage nor law imposed payment of the Commission

104. The trial judge then turned to art. 1434 of the C.C.Q. and considered whether the obligation to

pay the Commission was imposed by usage, equity or law:

1434. A contract validly formed binds the parties who have entered into it not only as to what they have expressed in it but also as to what is incident to it according to its nature and in conformity with usage, equity or law.

1434. Le contrat valablement formé oblige ceux qui l’ont conclu non seulement pour ce qu’ils y ont exprimé, mais aussi pour tout ce qui en découle d’après sa nature et suivant les usages, l’équité ou la loi.

105. A party who invokes an implicit contractual obligation, as Amex is,148 has a heavy burden:

Ce qui importe le plus, à notre avis, c’est que la jurisprudence québécoise fasse preuve d’une certaine prudence, et qu’elle n’établisse d’obligations implicites que dans les contextes où, d’après les standards généralement admis dans notre société à l’époque pertinente, il y a vraiment lieu de les imposer. On a pu avancer qu’une obligation implicite ne devrait être établie que si, en son absence, le contrat serait clairement inéquitable ou qu’elle répond objectivement aux attentes légitimes d’une partie selon la nature du contrat. La poursuite de la

145 Trial Judgment, paras. 124-127 and 360, Joint Record, Vol. 1, pp. 24-25 and 54. 146 See also: C.P.A., s. 17, SABA, Vol. I, Tab 4, p. 32 which is to the same effect with respect to consumer

contracts. 147 Mobi-cell inc. v. Bell Distribution inc., J.E. 2010-108 (C.A.Q.), SABA, Vol. II, Tab 42, p. 79, para. 27. 148 Banks’ Joint Factum, paras. 96-97, pp. 35-36.

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justice contractuelle ne doit pas se faire au détriment de la prévisibilité du droit ni à coup de solutions artificielles.149 [Citations omitted] [Emphasis added]

106. The evidence Amex pointed to at trial as proof of an implicit obligation to pay the Commission

was the testimony of two of the class members, which the trial judge held was not conclusive

enough to establish a usage across the entire foreign conversion industry. As the trial judge

further noted, the class representative himself, Mr. Adams, “testified that his understanding of his

agreement with Amex was that no commission would be charged.”150

107. As a matter of fact, between 1993 and 2003, there was no way for a cardholder to know that the

Commission was being charged. Amex nowhere disclosed the existence of the Commission or its

percentage, even when cardholders contacted its call centres to enquire about foreign currency

conversion.151

108. In order to convince this Court of an industry-wide usage, Amex now contends, based on the

evidence filed in Marcotte (Banks) and Fédération des caisses Desjardins du Québec v.

Marcotte,152 that “all the other conversion options involve a charge.”153 No such evidence was led

in this case and the Trial Judgment contains no finding to that effect.

109. In any event, not only is Amex’s contention of usage unsupported by the evidence but, as was

proven at trial, “[a]t that time, the practise in the industry was in fact to disclose any commission

being charged. The FCAC had to reprimand Amex because it was not following this practise.”154

110. As a result, the trial judge found that Amex’s burden of proving a usage to support its claim that

the Commission was owed by the cardholders was “not even remotely met.”155

149 Baudouin and Jobin, No. 467, SABA, Vol. II, Tab 60, p. 286. 150 Trial Judgment, para. 368, Joint Record, Vol. 1, p. 55. 151 Report of the FCAC, p. 4, Exhibit P-29, Joint Record, Vol. 12, p. 217; Trial Judgment, para. 262, Joint

Record, Vol. 1, p. 41. 152 Fédération des caisses Desjardins du Québec v. Marcotte, 2012 QCCA 1395, in appeal before this Court,

S.C.C. No. 35088. 153 Banks’ Joint Factum, para. 97, p. 36. 154 Trial Judgment, para. 369, Joint Record, Vol. 1, p. 55. See also: Report of the FCAC, p. 4, Exhibit P-29,

Joint Record, Vol. 12, p. 217. 155 Trial Judgment, para. 367, Joint Record, Vol. 1, p. 54.

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111. Furthermore, from March 1993 to August 31, 2001 for all class members, and from September 1,

2001 onward for Primary Group members, the successive versions of the Bank Act and the Cost

of Borrowing Regulations imposed a statutory obligation for banks to disclose “non-interest

charges” in their cardholder agreements.156

112. Where the legislator imposes an obligation to disclose specific information, that information must

be considered as forming an important element of the contract.157 In the words of the Court of

Appeal, “the conversion fee was a material element that needed to be disclosed by Amex to be

enforceable against its cardholders as part of the agreements binding them. Since it was not, there

is no obligation to pay it under the law.”158

113. Consequently, by any standard of review, the lower courts’ conclusion that the class members

were under no legal obligation to pay the Commission should not be disturbed.

iii. Where no obligation to pay for a service exists, quantum meruit does not apply

114. Before this Court, Amex argues for the first time that even if there is no contractual obligation to

pay the Commission, the provision of a service – here, using an Amex card to make a purchase in

a foreign currency – still gives rise to an obligation to pay a reasonable charge on a quantum

meruit basis.159

115. This is incorrect. Article 2106 of the C.C.Q. provides:

2106. The price of the work or services is fixed by the contract, by usage or by law or on the basis of the value of the work carried out or the services rendered.

2106. Le prix de l’ouvrage ou du service est déterminé par le contrat, les usages ou la loi, ou encore d’après la valeur des travaux effectués ou des services rendus.

156 Between 1993 and 2001, pursuant to s. 4 of the 1992 Cost of Borrowing Regulations, SABA, Vol. I,

Tab 6, pp. 46-47, s. 452(2) of the Bank Act, Vol. I, Tab 1.1, p. 7 and s. 10(1)(b) of the 1992 Cost of Borrowing Regulations, Vol. I, Tab 6, p. 49 applied to both consumer and non-consumer contracts and therefore covered all class members. Beginning on August 31, 2001, the amended version of s. 452(2) of the Bank Act, Vol. I, Tab 1.1, p. 7, only applied to “natural persons,” while s. 2 of the 2001 Cost of Borrowing Regulations, Vol. I, Tab 5, pp. 41-42, stipulated that the mandatory disclosure requirements found notably at ss. 10(1)(c) and 12(1), Vol. I, Tab 5, pp. 43-45, did not apply to credit agreements entered into “for business purposes” or “with a borrower that is not a natural person.”

157 Joyal v. Élite Tours inc., J.E. 93-729 (S.C.Q.), SABA, Vol. II, Tab 37, p. 25. See also: Bank of Montreal v. Quebec (Attorney General), [1979] 1 S.C.R. 565, SABA, Vol. I, Tab 15, p. 139, where this Court held that the mandatory provisions of the Bills of Exchange Act formed part of a contract between a bank and its customers.

158 Court of Appeal Judgment, para. 39, Joint Record, Vol. 2, p. 16. 159 Banks’ Joint Factum, para. 98, p. 36.

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116. As such, under Quebec law, quantum meruit is only used where an obligation to pay for a service

has been established but the amount of remuneration is not fixed in the contract, by usage or

law.160 Conversely, if the contract creates no obligation to pay for a service, as is the case here,

quantum meruit does not apply.

117. In this regard, the Quebec Superior Court’s judgment in Leblanc v. United Parcel Service of

Canada ltée161 is of no assistance to Amex. In that case, based on the evidence presented during a

class action authorization hearing, the motions judge found that, on a prima facie basis, in

addition to the cost of transport, the contract at issue included an implicit obligation for clients to

pay for brokerage services. As the contract did not set out a price for the brokerage service, it had

to be determined on a quantum meruit basis.

118. As has been previously demonstrated, the cardholder agreements at issue in this case contained

no explicit or implicit obligation to pay the Commission. Recourse to quantum meruit is therefore

neither necessary nor allowed.

iv. There must be restitution of the payments made in error

119. Since the cardholder agreements did not provide for the Commission, the trial judge correctly

concluded that class members were entitled to its restitution, as provided for at arts. 1491 and

1554 of the C.C.Q.162 As the Court of Appeal held in Green Line Investor Services Inc. v. Quin:

Les tribunaux ont accueilli à plusieurs reprises l’action en répétition de l’indu malgré l’existence d’une dette du solvens envers l’accipiens, lorsque le solvens avait payé plus que ne le prévoyait le contrat.163 [Emphasis added]

120. Amex incorrectly relies on ss. 16 and 988 of the Bank Act to argue against restitution.164

160 International Paper Co. v. Valeurs Trimont Ltée, [1989] R.J.Q.1187 (C.A.), para. 33, cited in the Banks’

Joint Factum, para. 98, fn. 139, p. 36. 161 Leblanc v. United Parcel Service of Canada ltée, J.E. 2012-1997 (S.C.Q.), referred to in the Banks’ Joint

Factum, para. 97, fns. 134 and 137, p. 36. 162 Trial Judgment, paras. 372-374, Joint Record, Vol. 1, p. 56. See also: Court of Appeal Judgment,

paras. 39-42, Joint Record, Vol. 2, pp. 16-17. 163 Green Line Investor Services Inc. v. Quin, J.E. 96-1493 (C.A.Q.), SABA, Vol. II, Tab 34, p. 5. See also:

Orchidée blanche, SABA, Vol. I, Tab 10, p. 79, para. 42. 164 Banks’ Joint Factum, para. 99, p. 37; Amex’s Factum, para. 52 sub. 3, p. 18. See also: Banks’ Joint

Factum, paras. 87-88, p. 33.

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121. Firstly, Amex cannot reasonably be arguing that Parliament intended to preclude restitution of

moneys taken by banks without contractual or legal right, which would be the effect of adopting

its position. Such a blanket immunity would be unprecedented and unjustifiable.

122. Secondly, as previously noted and contrary to Amex’s assertion,165 the trial judge and the Court

of Appeal did not rely on a breach of the Bank Act and its regulations as the basis for ordering

restitution. Instead, these provisions were taken into account as part of their determination of the

parties’ obligations, as prescribed by art. 1434 of the C.C.Q. The cardholder agreements, and not

the Bank Act, are the source of the Respondent’s claim.

123. Finally, the Respondent is not seeking to have the cardholder agreements invalidated, which is all

that s. 988 of the Bank Act excludes. For its part, s. 16 reads as follows:

16. No act of a bank or authorized foreign bank, including any transfer of property to or by a bank or authorized foreign bank, is invalid by reason only that the act or transfer is contrary to

(a) in the case of a bank, the bank’s incorporating instrument or this Act; or

(b) in the case of an authorized foreign bank, this Act.

16. Les faits de la banque ou de la banque étrangère autorisée, notamment en matière de transfert de biens, ne sont pas nuls au seul motif qu’ils sont contraires, dans le cas d’une banque, à la présente loi ou à son acte constitutif ou, dans le cas d’une banque étrangère autorisée, à la présente loi. [Emphasis added]

124. What s. 16 prohibits is invalidating an act or transfer of a bank “by reason only” that it is contrary

to the Act, which was the situation in Continental Bank Leasing Corp. v. Canada.166 The

payments in this case were not only contrary to s. 452 of the Bank Act and the Cost of Borrowing

Regulations, but were not justified by any explicit or implicit obligation. Assuming that charging

the Commission could be qualified as an “act of a bank”, the payments that Amex must now

reimburse are not invalid “by reason only” that they were “contrary to […] this Act”, but because

they were not supported by any binding contractual obligation between the parties.

165 Banks’ Joint Factum, para. 93, pp. 34-35. See also: Amex’s Factum, para. 52 sub. 3, p. 18. 166 Continental Bank Leasing Corp. v. Canada, [1998] 2 S.C.R. 298. See: Banks’ Joint Factum, para. 88,

p. 33.

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v. Only restitution of the payments made by the cardholders is warranted

125. Article 1492 of the C.C.Q. provides that restitution of a thing not due follows the rules on the

restitution of prestations, which are found at arts. 1699 and following of the C.C.Q.:

1492. Restitution of payments not due is made according to the rules of restitution of prestations.

1492. La restitution de ce qui a été payé indûment se fait suivant les règles de la restitution des prestations.

126. Amex argues that in the event that it must restore the Commission, class members should have to

restore to Amex the value of the conversion service it provided.167 Amex’s argument is flawed on

several levels.

127. To begin with, from an evidentiary standpoint, as noted by the Court of Appeal, Amex “failed to

adduce evidence as to the actual cost of the foreign currency services.”168 This should be

sufficient to dispose of its argument. Since the value of the service provided by Amex was not

proven at trial, legally speaking, there is nothing to set off against the amounts to be paid back to

the class members.169

128. Furthermore, Amex is confusing the restitution of prestations that takes place when a contract is

annulled with restitution in the context of the reception of a thing not due. As noted by Baudouin

and Jobin, art. 1699 of the C.C.Q. “universalise les règles de la remise en état, les appliquant

aussi bien aux nullités et à la résolution qu’à la réception de l’indu.”170 As such, art. 1699(1) of

the C.C.Q. now covers three distinct situations:

1699. Restitution of prestations takes place where a person is bound by law to return to another person the property he has received, either unlawfully or by error, or under a juridical act which is subsequently annulled retroactively or under which the obligations become impossible to perform by reason of superior force.

1699. La restitution des prestations a lieu chaque fois qu’une personne est, en vertu de la loi, tenue de rendre à une autre des biens qu’elle a reçus sans droit ou par erreur, ou encore en vertu d’un acte juridique qui est subséquemment anéanti de façon rétroactive ou dont les obligations deviennent impossibles à exécuter en raison d'une force majeure. [Emphasis added]

167 Amex’s Factum, para. 52 sub. 4, p. 18. See also: Banks’ Joint Factum, paras. 100-101, pp. 37-38. 168 Court of Appeal Judgment, para. 48, Joint Record, Vol. 2, p. 19. 169 C.C.Q., art. 2803, SABA, Vol. I, Tab. 2.1, p. 21.1. 170 Baudouin and Jobin, no. 564, SABA, Vol. II, Tab 60, pp. 289-290.

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129. The Quebec legislator’s decision to provide for a single remedy applicable to three different

sources of obligations does not mean that the fundamental differences between those sources

should be ignored. It is not because art. 1699(1) pluralizes “restitution of prestations” that

restitution is by necessity reciprocal in all cases.

130. By definition, “reception of a thing not due” entails the unilateral restitution of the thing that was

not due by the party who received it to the person who gave it.171 As art. 1491 of the C.C.Q.

makes clear: “A person who receives a payment made in error […] is obliged to restore it.”

131. By contrast, where the nullity of a contract is concerned, art. 1422 of the C.C.Q. provides that the

contract “is deemed never to have existed” and “each party is bound to restore to the other the

prestations he has received.”172 Restitution is therefore reciprocal.

132. Amex was ordered to make restitution on the basis that it received something that was not due.173

Accordingly, restitution in this case is unilateral, not reciprocal.

133. Class members received the benefits to which they were entitled under their cardholder

agreements and paid whatever fees were owed pursuant to their terms, which did not include the

Commission. Consequently, there was nothing for the class members to restore to Amex.

vi. The trial judge properly exercised his discretion not to refuse restitution

134. Finally, Amex pleads that the trial judge erred when he failed to exercise the discretion accorded

in article 1699(2) of the C.C.Q to refuse restitution.174 That provision reads as follows:

1699. […] The court may, exceptionally, refuse restitution where it would have the effect of according an undue advantage to one party, whether the debtor or the creditor, unless it deems it sufficient, in that case, to modify the scope or mode of the restitution instead.

1699. […] Le tribunal peut, exception-nellement, refuser la restitution lorsqu’elle aurait pour effet d’accorder à l’une des parties, débiteur ou créancier, un avantage indu, à moins qu’il ne juge suffisant, dans ce cas, de modifier plutôt l’étendue ou les modalités de la restitution. [Emphasis added]

171 Willmor Discount, SABA, Vol. II, Tab 59, pp. 282-283. 172 Article 1606(1) of the C.C.Q., SABA, Vol. I, Tab 2.1, p. 18, which applies to the resolution of a contract,

is to the same effect. 173 Trial Judgment, paras. 372-374, Joint Record, Vol. 1, p. 56. See also: Court of Appeal Judgment,

paras. 39-42, Joint Record, Vol. 2, pp. 16-17. 174 Amex’s Factum, para. 52, subs. 5 and 6, pp. 18-19. See also: Banks’ Joint Factum, paras. 102-104, pp. 38-39.

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135. This power is a discretionary one.175 As a result, an appellate court may only intervene “where it

finds that the trial judge has misdirected himself as to the applicable law or made a palpable error

in his assessment of the facts.”176 Moreover, as the text of the provision suggests and the

jurisprudence confirms, the power to refuse restitution is only exercised exceptionally. As the

Court of Appeal wrote in St-Pierre:

En premier lieu je note que, selon les termes de cet article, le tribunal peut, exceptionnellement, refuser la restitution. C’est donc que, normalement, la restitution des prestations est le redressement approprié en cas de nullité.177 [Italics in the original]

136. Amex has shown no error in the trial judge’s interpretation of the law, which confirms the

exceptional nature of this discretion. The Court of Appeal found no error in the trial judge’s

appreciation of the evidence, much less a palpable and overriding one, and concluded that Amex

“failed to show that the trial judge did not exercise his discretion judiciously by refusing to apply

the exception to restitution.”178 That finding should be upheld by this Court.

137. The power given to a trial judge by art. 1699(2) is meant to be exercised in situations where

restitution would cause a loss to an innocent party or would confer an inappropriate advantage on

the party who is responsible for the situation leading to restitution.179 That is how the advantage

can be qualified as “undue”. Any other “advantage” that flows from restitution does not qualify

as “undue” and cannot trigger the application of art. 1699(2).

138. As such, barring situations where bad faith had been established180 or subsequent events have so

diminished the value of the thing to be returned that an adjustment has to be made to avoid

175 Amusements St-Gervais inc. v. Legault, J.E. 2000-550 (C.A.Q.) (“Amusements St-Gervais”), SABA,

Vol. I, Tab 12, p. 91, para. 32; Montréal (Ville de) v. St-Pierre (Succession de), [2009] R.J.Q. 54 (C.A.) (“St-Pierre”), SABA, Vol. X, Tab 43, pp. 84-85, para. 38; Court of Appeal Judgment, Joint Record, Vol. 2, para. 50, p. 19. The cases mentioned in the Banks’ Joint Factum, para. 100, fn. 141, p. 37, are to the same effect. See for example: Langevin v. Mercier, J.E. 2010-1783 (C.A.), para. 70; Droit de la famille – 11848, 2011 QCCA 635, para. 6; Pétroles St-Jean v. 2865-9985 Québec inc., [1998] J.Q. no. 4799 (C.A.), para. 141.

176 British Columbia (Minister of Forests) v. Okanagan Indian Band, [2003] 3 S.C.R. 371, SABA, Vol. I, Tab 25, p. 255, para. 43.

177 St-Pierre, SABA, Vol. II, Tab 43, p. 85, para. 39. 178 Court of Appeal Judgment, para. 50, Joint Record, Vol. 2, p. 19. 179 Baudouin and Jobin, nos. 841-842, SABA, Vol. II, Tab 60, pp. 294-298. 180 Amusements St-Gervais, SABA, Vol. I, Tab 12, p. 91, para. 32; Québec (Sous-ministre du Revenu) v.

B.D., [2002] R.J.Q. 54 (C.A.), SABA, Vol. II, Tab 52, pp. 192-193, paras. 20-22, p. 194, para. 26 and p. 195, para. 38; Cauchon v. Mailhot, EYB 2012-216827 (C.Q.), SABA, Vol. I, Tab 29, pp. 309-310, paras, 58-63.

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causing hardship to one party,181 restitution of a sum of money does not confer an undue

advantage on the party to whom restitution is owed: “Basic restitutionary principles ‘provide for

restoration of ‘what has been taken or received from the plaintiff without justification’…

Restitution law is not concerned by the possibility of the plaintiff obtaining a windfall precisely

because it is not founded on the concept of compensation for loss’”.182

139. As the Court of Appeal correctly noted: “Of course, the burden lies on the debtor to establish that

restitution would result in an undue advantage to the creditor”.183

140. The trial judge’s refusal to exercise his discretion in Amex’s favour was based on his assessment

of the evidence Amex invoked to demonstrate that cardholders received an undue advantage,

which he found unsatisfactory:

[380] While Article 1699(2) CCQ allows this discretion to be exercised exceptionally, the evidence submitted by Amex fails to show any undue advantage to the class members. One cannot simply isolate the alleged benefit of the Commission being reimbursed to the class members and ignore the other benefits Amex would have undoubtedly received through the use of its cards by these class members in carrying foreign currency transactions.

[381] Simply put, the evidence is far too incomplete for the Court to conclude that any advantage in granting restitution of the Commission to the class members could be qualified as “undue” under the CCQ.184 [Emphasis added]

141. As the Court of Appeal noted, not only was the use of Amex cards a revenue-generating venture

for Amex irrespective of the Commission, but any loss would be borne by Amex’s parent

company, the entity that had ultimately benefited from the payments:

[48] The evidence shows that the American Express system benefits from the use of the cards in various ways: discounts collected from the merchants paid by using the card, higher volumes of transactions, membership fees, etc. Amex also failed to adduce evidence as to the actual cost of the foreign currency services so that the judge could have determined only a partial restitution. As

181 Bernferst Holdings Inc. v. Jil-Steve Holdings Ltd., B.E. 2009BE-765 (S.C.Q.), SABA, Vol. I, Tab 22,

pp. 218-219, paras. 32-35; Lacroix (Syndic de), J.E. 2009-1520 (S.C.Q.), SABA, Vol. II, Tab 38, pp. 33-34, paras. 44-46.

182 Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57, SABA, Vol. II, Tab 48, p. 149, para. 22, quoting Kingstreet Investments Ltd. v. New Brunswick (Finance), [2007] 1 S.C.R. 3, para. 47 [Emphasis added].

183 Court of Appeal Judgment, para. 45, Joint Record, Vol. 2, p. 18, citing St-Pierre, SABA, Vol. II, Tab 43, p. 88, para. 48.

184 Trial Judgment, paras. 380-381, Joint Record, Vol. 1, p. 57.

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for the cardholders, it is difficult to conclude that the restitution of an amount equivalent to 1% to 2.2% of their purchases in foreign currencies between 1993 and 2003, obviously small amounts, will result in undue advantage to each of them.

[49] It is true though that Amex will have to bear a cost of about 20 million dollars (capital and interests) even though it did not benefit from the conversion fee. But there is no indication that such a “loss” would be an excessive burden for it; furthermore, this loss will ultimately be borne by its shareholder, TRS, the entity that benefited from the undisclosed commission. In any case, Amex being the sole party in the American Express system with which the cardholder has a contract, it is the one that must be accountable for the fee charged to the cardholders.185 [Emphasis added]

142. The fact that Amex received other benefits over and above the Commission suffices to

distinguish this case from Marcotte v. Longueuil (City), where the city had received no such

additional benefit from its taxpayers. The city was further bound to suffer a net loss as a result of

having to reimburse municipal taxes, a loss which, by law, would need to be made up by raising

new taxes on the same taxpayers who were also class members.186

143. Finally, it was as a result of Amex’s own actions that restitution is owed to class members. It had

complete control over the text of its agreements and, in 1993, it made a “deliberate and

conscientious” choice to remove any reference to the Commission, which “certainly did not

enhance the clarity of the foreign currency transaction charges for the average consumer. At

worst, one can infer that it was simply meant to conceal the commission.”187 Amex should not be

allowed to profit from such action.188

----------

185 Judgment of the Court of Appeal, paras. 48-49, Joint Record, Vol. 2, p. 19. 186 Marcotte v. Longueuil (City), [2009] 3 S.C.R. 65, SABA, Vol. II, Tab 40, pp. 49-51, paras. 34-36, cited in

the Banks’ Joint Factum, para. 100, fn. 141, p. 37. It should also be noted that in that case, unlike the present one, this Court was not being asked to reverse the discretionary decision of a trial judge, based on his assessment of the evidence, but was looking at the issue in the context of the summary assessment of the facts and the law required at the authorization stage of a class action.

187 Trial Judgment, para. 181, Joint Record, Vol. 1, p. 31. 188 Banque Nationale v. Soucisse, [1981] 2 S.C.R.. 339, SABA, Vol. I, Tab 18, pp. 165 and 168-170.

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Respondent Sylvan Adams’ Factum Submissions Concerning Costs

PART IV – SUBMISSIONS CONCERNING COSTS

144. Costs should be awarded to the Respondent in this Court and in the courts below.

----------

PART V – ORDER SOUGHT

145. FOR THESE REASONS, the Respondent requests an order:

(a) Dismissing the appeal;

(b) Declaring that ss. 12, 219 and 272(c) of the Consumer Protection Act are constitutionally

applicable to bank-issued credit and charge cards;

(c) Declaring that ss. 12, 219 and 272(c) of the Consumer Protection Act are operative in

regards to bank-issued credit and charge cards;

(d) Confirming the judgment of the Quebec Court of Appeal dated August 2, 2012, which

affirmed in part the judgment of the Superior Court of Quebec dated June 11, 2009 and

granted in part the Respondent’s class action.

ALL OF WHICH IS RESPECTFULLY SUBMITTED in Montreal, this 11th day of November, 2013.

_____________________________________

Mr. Peter Kalichman Ms. Catherine McKenzie Mr. Mathieu Bouchard Irving Mitchell Kalichman LLP Counsel for the Respondent Sylvan Adams

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Respondent Sylvan Adams’ Factum Alphabetical Table of Authorities

PART VI – ALPHABETICAL TABLE OF AUTHORITIES

Jurisprudence Paragraph(s)

114957 Canada ltée (Spraytech, société d’arrosage) v. Hudson (Town), [2001] 2 S.C.R. 241 .......................................... 51

Agence de développement de réseaux locaux de services de santé et de services sociaux de Laval (Régie régionale de la santé et de services sociaux de Laval) v. 9112-4511 Québec inc. (Orchidée blanche, Centre d’hébergement et de soins de longue durée inc.), J.E. 2006-2343 (S.C.Q.) (aff’d, J.E. 2008-1066 (C.A.Q.)) ................................... 82,119

Alberta Giftwares Ltd. v. The Queen, [1974] S.C.R. 584 .......................................... 90

Alltrans Express Ltd. v. British Columbia (Workers’ Compensation Board), [1988] 1 S.C.R. 897 .......................................... 24

Amusements St-Gervais inc. v. Legault, J.E. 2000-550 (C.A.Q.) ................................. 135,138

Ayotte v. Banque Nationale du Canada, December 16, 2002, C.Q. 500-22-066454-011 .......................................... 29

Bank of Montreal v. Hall, [1990] 1 S.C.R. 121 .......................................... 28

Bank of Montreal v. Quebec (Attorney General), [1979] 1 S.C.R. 565 ........................................ 112

Banque de Montréal v. Nadon, [1990] R.J.Q. 880 (C.Q.) .......................................... 29

Banque Nationale du Canada v. Kaziberdov, [2007] R.J.Q. 1068 (C.Q.) .......................................... 29

Banque Nationale v. Soucisse, [1981] 2 S.C.R. 339 ........................................ 143

Banque Royale du Canada v. Chenier, J.E. 97-1855 (C.Q.) .......................................... 29

Barrie Public Utilities v. Canadian Cable Television Association, [2003] 1 S.C.R. 476 .......................................... 66

Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), [1988] 1 S.C.R. 749 ................................ 23,24,76

Bell Canada v. The Plan Group (2009), 96 O.R. (3d) 81 (C.A.) .......................................... 90

Bernferst Holdings Inc. v. Jil-Steve Holdings Ltd., B.E. 2009BE-765 (S.C.Q.) ........................................ 138

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Jurisprudence (cont’d) Paragraph(s)

Boissonneault v. Banque de Montréal, [1988] R.J.Q. 2622 (C.A.) .......................................... 29

British Columbia (Attorney General) v. Lafarge Canada Inc., [2007] 2 S.C.R. 86 ..................................... 52,59

British Columbia (Minister of Forests) v. Okanagan Indian Band, [2003] 3 S.C.R. 371 ........................................ 135

Canada (Attorney General) v. TeleZone Inc., [2010] 3 S.C.R. 585 .......................................... 71

Canadian Western Bank v. Alberta, [2007] 2 S.C.R. 3 ....... 15,27,36,38,40,48,51,54 ........................... 59,60,62,77

Cassano v. The Toronto-Dominion Bank, 2007 ONCA 781 (CanLII) (leave to appeal denied, March 27, 2008, S.C.C. No. 32424) .......................................... 83

Cauchon v. Mailhot, EYB 2012-216827 (C.Q.) ........................................ 138

Chatterjee v. Ontario (Attorney General), [2009] 1 S.C.R. 624 ..................................... 46,51

Continental Bank Leasing Corp. v. Canada, [1998] 2 S.C.R. 298 ........................................ 124

Dick v. The Queen, [1985] 2 S.C.R. 309 .......................................... 57

Droit de la famille – 11848, 2011 QCCA 635 ........................................ 135

F. Picard Recyclage inc. v. Gestion sanitaire M & M inc., 2011 QCCA 2185 .......................................... 88

Fédération des caisses Desjardins du Québec v. Marcotte, 2012 QCCA 1395 ........................................ 108

Gravino v. Banque de Montréal, J.E. 99-724 (S.C.Q.) .......................................... 29

Green Line Investor Services Inc. v. Quin, J.E. 96-1493 (C.A.Q.) ........................................ 119

H.L. v. Canada (Attorney General), [2005] 1 S.C.R. 401 .......................................... 90

Houle v. Canadian National Bank, [1990] 3 S.C.R. 122 .......................................... 28

Housen v. Nikolaisen, [2005] 1 S.C.R. 235 .......................................... 90

Immeubles Régime XV inc. v. Indigo Books & Music Inc., 2012 QCCA 239 .......................................... 88

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International Paper Co. v. Valeurs Trimont Ltée, [1989] R.J.Q.1187 (C.A.) ........................................ 116

Joyal v. Élite Tours inc., J.E. 93-729 (S.C.) ........................................ 112

Kingstreet Investments Ltd. v. New Brunswick (Finance), [2007] 1 S.C.R. 3 ........................................ 138

Lacroix (Syndic de), J.E. 2009-1520 (S.C.Q.) ........................................ 138

Langevin v. Mercier, J.E. 2010-1783 (C.A.) ........................................ 135

Leblanc v. United Parcel Service of Canada ltée, J.E. 2012-1997 (S.C.Q.) ........................................ 117

MacDougall v. MacDougall, 2005 Can LII 44676 (ON CA) .......................................... 88

Marcotte v. Longueuil (City), [2009] 3 S.C.R. 65 ........................................ 142

Marine Services International Ltd. v. Ryan Estate, 2013 SCC 44 ................. 11,15,17,20,38,54

Mobi-cell inc. v. Bell Distribution inc., J.E. 2010-108 (C.A.Q.) ........................................ 103

Montréal (Ville de) v. St-Pierre (Succession de), [2009] R.J.Q. 54 (C.A.) ................................. 135,139

Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161 ...................... 37,40,51,52,54

Nadeau v. Banque de Montréal, EYB 2008-146400 (C.Q.) .......................................... 29

Ordon Estate v. Grail, [1998] 3 S.C.R. 437 .......................................... 71

Pétroles St-Jean v. 2865-9985 Québec inc., [1998] J.Q. no. 4799 (C.A.) ........................................ 135

Petty v. Telus Corp., 2002 BCCA 135 .......................................... 88

Pro-Sys Consultants Ltd. v. Microsoft Corporation, 2013 SCC 57 ........................................ 138

Procureur général du Québec v. Banque de Nouvelle-Écosse, [1986] R.J.Q. 1546 (C.A.) .......................................... 29

Quebec (Attorney General) v. Canadian Owners and Pilots Association, [2010] 2 S.C.R. 536 ................................ 26,33,39

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Quebec (Attorney General) v. Lacombe, [2010] 2 S.C.R. 453 .......................................... 66

Québec (Sous-ministre du Revenu) v. B.D., [2002] R.J.Q. 54 (C.A.) ........................................ 138

Re: Resolution to Amend the Constitution, [1981] 1 S.C.R. 753 .......................................... 60

Reference re the Securities Act, [2011] 3 S.C.R. 837 ..................................... 26,53

Richard v. Time Inc., [2012] 1 S.C.R. 265 ........................................ 101

Rothmans, Benson & Hedges Inc. v. Saskatchewan, [2005] 1 S.C.R. 188 ..................................... 37,51

The Queen v. Beauregard, [1986] 2 S.C.R. 56 ............................................. 60

Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595 .......................................... 37

Willmor Discount Corp. v. Vaudreuil (City), [1994] 2 S.C.R. 210 ................................... 82,130

Doctrine

Jean-Louis Baudouin and Pierre-Gabriel Jobin, with the collaboration of Nathalie Vézina, Les obligations, 6th ed. (Cowansville: Éditions Yvon Blais, 2005) No. 560 ..................... 82,105,128,137

Robin Elliot, “Safeguarding Provincial Autonomy from the Supreme Court’s New Federal Paramountcy Doctrine: A Constructive Role for the Intention to Cover the Field Test?” (2007) 38 Sup. Ct. L. Rev. (2d) 629 .......................................... 58

Peter W. Hogg, Constitutional Law of Canada, 5th ed. supplemented, loose-leaf (Toronto: Carswell, 2007) ................................ 56,57,60

C. SCC 35033 - Respondent Sylvan Adams' Factum

Documents

Transcript of C. SCC 35033 - Respondent Sylvan Adams' Factum