Court rules widow doesn’t have to pay late husband’s RBC credit card balance

The B.C. Supreme Court has ruled against one of Canada’s big banks in a true David and Goliath battle.

The Royal Bank of Canada took a former customer’s widow to court last year, seeking for the woman to pay back her late husband’s credit card debt, along with more than $17,500 in interest, for a total of $51,764.09.

In a ruling handed down Monday, Justice Lindsay M. Lyster ruled against the bank, explaining that Carol Smith is not liable for her husband, Alfred Smith’s, accumulated debt.

Lyster’s judgment explained that the bank did not prove, or provide documentation, that clearly shows Carol’s agreement to become a cardholder, or apply as a co-applicant.

“[The plaintiff] says that, by accepting and using the credit card, the defendant agreed to be bound by the terms and conditions of the applicable Cardholder’s Agreement. She says that the plaintiff’s normal practice was that a copy of the Cardholder’s Agreement was sent to the cardholders together with the credit cards. There is no evidence as to whether that occurred in this case,” Lyster explained.

“For her part, Mrs. Smith says that she never applied for a Royal Bank credit card and never agreed to any of the terms in the Cardholder’s Agreement.”

According to Carol Smith, when she rarely used her husband’s credit card, she did so under the belief she was an “authorized user,” but “he was solely responsible for all balances.”

Lyster explained that RBC is the plaintiff in the case, and “bears the burden of proof” for proving Carol Smith agreed to be a co-applicant.

“The Bank has failed to produce the application for the credit card, despite being requested to do so at Ms. Larmond’s first examination for discovery. [The plaintiff] has no personal knowledge of who applied for the credit card. All she can do is make assumptions or inferences based on the credit card statements, which are addressed to both Mr. and Mrs. Smith, and the Bank’s usual practice. This is apparent from her examination for discovery,” Lyster determined.

“[The plaintiff] says that by using the card, Mrs. Smith agreed to be bound by the Cardholder’s Agreement. But the evidence does not establish that the Cardholder’s Agreement in general, or the notion that by using the card she was liable for the balance owing on the card in particular, was ever brought to Mrs. Smith’s attention.

“On the evidence before me, the Bank has failed to establish that Mrs. Smith was a co-applicant for the card. As a result, she is not liable under the terms of the Cardholder’s Agreement for the balance and accrued interest owing on the card.”