Case information

Civil procedure — Class actions — Authorization — Question of pure law — Financial institutions — Banks — Transactions exceeding credit limit — Consumer protection — Applicant seeking authorization to represent classes of consumers in order to determine whether credit limit being exceeded amounts to unilateral increase in credit limit, which is prohibited by applicable legislation — Courts below holding that class action had no possibility of success — Whether consumer’s consent is required before authorizing transaction that results in credit limit set out in credit card agreement being exceeded — Questions of pure law that judge has discretion to decide at authorization stage — Probative value of subsequent legislative history of statute where judge embarks on interpretation exercise — Code of Civil Procedure, CQLR, c. C 25.01, art. 575(2) — Credit Business Practices (Banks, Authorized Foreign Banks, Trust and Loan Companies, Retail Associations, Canadian Insurance Companies and Foreign Insurance Companies) Regulations, SOR/2009 257, ss. 5 and 6 — Consumer Protection Act, CQLR, c. P 40.1, ss. 128.1 to 128.3.

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The federal and Quebec schemes for consumer protection in financial matters prohibit institutions that issue credit cards from increasing a credit limit without the consumer’s express agreement. This case concerns the practice engaged in by these institutions of occasionally allowing customers to carry out one or more transactions that put them over their credit limit temporarily. The applicant alleged that a number of financial institutions, the respondents, were engaging in this practice, which she considered illegal, and sought authorization to institute a class action on behalf of three classes of consumers. The Superior Court found that the question raised by the applicant was a pure question of law that could be decided at the authorization stage. It held that the applicant’s reading of the provisions on which she relied was wrong, and it therefore refused to authorize the class action. The Court of Appeal dismissed the applicant’s appeal. It thus agreed with the lower court’s analysis, finding that there was a clear distinction between increasing a credit limit and exceeding that limit under the applicable legislation.