Although it’s not used much these days, the phrase ‘Til Death Do Us Part used to be part of a traditional wedding ceremony in Canada. But it turns out a husband’s death didn’t stop a Bank from trying to recover nearly $52,0000 in unpaid credit card balances from his 74-year-old wife.
In a B.C. ruling handed down just the other day, the wife was named Carol, and her late husband was Alfred. In a span of the few years before he died in late 2019, Alfred had racked up a hefty credit card bill with Royal Bank of Canada, hastened by a series of credit limit increases (and it was in dispute over whether Alfred formally authorized them).
The end result was that Alfred died owing an unpaid balance plus interest totalling $34,000, to which the Bank had added nearly $18,000 for several years’ worth of interested accruing at 20 percent per annum.
With Alfred now deceased, the Bank turned to Carol for payment, but she disavowed liability.
While Carol and the Bank agreed that Alfred was the primary cardholder and was on the hook for any charges, they disagreed on whether Carol was a “Co-applicant”, or an “Authorized User” – and the Bank’s entire case turned on that characterization. That’s because under the Cardholder Agreement, these terms had different meanings and carried different levels of liability.
Carol said she was merely an “Authorized User”. This was someone who could use the card, but according to the Bank’s Agreement form had “no responsibility to us for any amounts owing for purchases, Cash Advances, fees and interest on the Account.” She gave evidence that she rarely used Alfred’s card, but when she did it was on the understanding that he would remain solely responsible for all balances because she was just an Authorized User. She outright denied ever applying for any Royal Bank card herself, or agreeing to the terms of the Cardholder Agreement.
It was up to the Bank to prove otherwise, and the court found it failed in this task. Other than pointing to its own internal records, the Bank offered scant evidence that Carol was actually a Co-applicant as it claimed. But the court rejected those internal records, stating:
That the bank referred to her in its records as a co-applicant, or did not refer to her as an authorized user, does not necessarily mean that the manner in which they referred to her was an accurate reflection of her status.
Also – and despite being asked by the court several times – the Bank did not provide a copy of the application form, proof of Carol being approved as Co-applicant, or any documents around the approval process for Alfred and Carol specifically. It could only offer up the evidence of a Bank representative, who had no personal involvement with Alfred’s account and could only attest to the Bank’s “normal practice” in these kinds of scenarios generally.
In the end, the court concluded that Carol was never a Co-Applicant, and therefore she was not liable for the unpaid credit card balance and interest. Nor could it be said that under the Cardholder Agreement, as worded, she was agreeing to become liable for the entire balance simply by using Alfred’s credit card on occasion. For such an onerous clause to be effective, the court said, the Bank would have had to bring it to Carol’s attention specifically.
For the full text of the decision, see:
Royal Bank of Canada v. Smith, 2024 BCSC 963 (CanLII), <https://canlii.ca/t/k50rm>
