Well I am no lawyer....but one does not have to be a chicken to recognise an egg. I see no viable defence raised in his Statement of Defence.

@TJ.brooks

Well no, you are not missing anything. In fact, you are "bang on" with your comments and observations.

Based on the commentary and the documentation that I read, the defendant has been a self-employed businessman in excess of 15 years and it appears, a very successful one as well. However, recently, he has been experiencing some very heavy financial "headwinds" resulting in serious reductions in cash flow and unable to meet his financial committments with respect to 2 CIBC Visa cards. This has resulted in the monthly payments on these 2 cards either being paid late or not paid at all.

Both cards, the CIBC Aerogold Visa, obtained in February, 1995 and the CIBC Platinum Visa, obtained in June 1998 carry an exorbitant rate of interest varying between 19.5% and 20.5%. I know that obtaining credit and financing for a business is not easy but paying these rates of interest over a long period of time is not sustainable especially during recessionary times when cash flow is so critical.

The defendant was well aware of his critical cash flow shortfall and had attempted, it appears, on several occasions, to restructure his financing with either a consolidated bank loan or a line of credit, either, of which, would draw a substantially lower rate of interest than his 2 CIBC Visa credit cards. Most banks will entertain a customer's request to restructure their financing but with the following caveat. A customer's existing financing must be current and up to date with no missing or late payments. A bank will also pull a customer's Credit Report to look for any derogatory entries such as late payments on debts, accounts that are in collection, judgments issued and the number of inquiries made during the past 12 months. It appears that both the defendant's financial and credit track record were not "squeeky clean", hence the bank's refusal to give consideration to any refinancing proposal.

But to be fair, the bank's lawyer's did offer the defendant an opportunity to discuss his financial situation by requesting the completion of a Financial Capacity Assessment Form to which the defendant refused. This, in my opinion, was a major mistake on the part of the defendant. While there is no guarantee that by completing this form honestly and correctly would have resulted in a restructuring of financial arrangements with the CIBC, by refusing to complete this form left the CIBC with no alternative but to commence legal proceedings against the defendant.

As you are well aware, when a credit card is issued, it comes with a Cardholder's Agreement. Under no circumstances should a credit card be activated or used before the cardholder has read and fully understands the terms and conditions set forth therein. If the cardholder does not understand the terms and conditions, then it would be prudent to contact the issuer of the credit card for a complete explanation of any item that is unclear. If this is not satisfactory or the explanation is not fully understood by the cardholder, then contact should be made with an accountant or lawyer so that those items that are unclear can be clarified to the satisfaction of the cardholder. If this involved the payment of a fee, consider it an investment in your education. If the explanation of the terms and conditions is still not satisfactory, then do not active or use the credit card. Simply return it to the card issuer.

Regardless of how one views a credit card, in essence, it is a demand loan made by the card issuer and full payment may be demanded of any unpaid and outstanding balance thereon at any time without cause or written notification to the cardholder. This is clearly stated in any Cardholder Agreement.

In Paragraph 8 of the defendant's Statement of Defence, he says "The unsecured nature of the credit facility offered ... is fundamental to the agreement..." I have reviewed in detail the CIBC Cardholder's Agreement and nowhere does it mention anything about the unsecured nature of the credit facility is fundamntal to the agreement.

In Paragraph 10, he states "The defendant has made a variety of payment proposals to the plaintiff with respect to the Visa account such that it may be kept current." As stated in the Cardholder's Agreement ( which is the legal and only contract governing the use of the credit card ), the only way it can be kept current is to make the minimum monthly payment as stated on the monthly Visa statement in a timely manner, i.e. paid by the due date as shown on the monthly Visa statement.

In Paragraph 12, he states "Obtaining a lien on the defendant's real property in favour of the plaintiff would be a breach of the agreement..." Oh really!!! Funny, I have read the CIBC Cardholder's Agreement from cover to cover and nowhere does it state that if the plaintiff registers a lien on the credit card holder's real property, that this action constitutes a breach of this agreement; therefore, this agreement is deemed to be null and void.

In Paragraph 13, he states "...the defendant received from the plaintiff a 'CIBC Visa Cardholder Agreement' speifically not a 'CIBC Aerogold Visa Agreement...". I hate to be the bearer of bad news but CIBC issues several types of Visa cards and with each card issued, a standard CIBC Visa Cardholder Agreement is included.

In Paragraph 15, he states "The specific steps that the plaintiff may take in the event that the "Credit Card Account is not in Good Standing" outlined in the CIBC Visa Cardholder Agreement, does not include taking legal action against the cardholder." If it doesn't include taking legal action against the cardholder, then what does it include? -------- the plaintiff sending a letter to the cardholder saying " you are such a naughty boy for not making your minimum monthly payment or making your payments after the due date and we beg you to please carefully consider making your paymnts on time, otherwise, this will cause us to become very angry and frustrated."

In summary, the defendant will lose this case BIG TIME, unless he can come to an agreement with CIBC's lawyers at the mandatory Pre-Trial Settlement Conference. Failure to reach an agreement at this conference, the case will proceed to trial and will entail additional court fees and court procedures that the defendant is probably not familiar with. Unless one is infinitely familiar with the Rules of Procedure, you have 2 strikes against you before you enter the courtroom. Should CIBC's lawyers be successful in obtaining a favourable judgment and later enforcing it with Writ of Execution on the plaintiff's personal residence, my comments in my precious post will apply.

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Educating one Consumer at a time

Am I missing something?
It is understood that should a credit card holder default on payments to the issuer of said card, that one remedy available to the creditor is to sue. This specifically relates to unsecured credit cards and or loans.

As I read the Statement of Claim the creditor is seeking a judgement for the amounts on 2 cards.

Should they be successful..they then have several options available to collect on the Judgement, including....

1. Garnishees

2. Leans on property.

Why is this a surprise to the defendant ?

This is common knowledge.

Had he had the secured card or LC....there would be no need for court.you would know it was a given that your property would be seized.

Although I would agree that perhaps the bank could have shown a little more compassion and worked out a reduced payment plan....that does not negate their right to procceed in this matter the way they have.

Everyone obtaining credit knows or should have known that they can be sued in the event they default on paying back their debt.

They also know that a judgment can be satisfied in a number of ways...and yes seizing property and or obtaining a lien is one of them.

So...what am I missing?

Thanks for the commentary Footloose.
Couple of points:
-There is no default judgement. There was a notice of intent to defend filed prior to the defence which was filed on time.
-It's easy to suggest obtaining legal help. Yes that is the preferable course of action. However when lawyers want a $10k retainer sometimes you have no choice.
That's exactly what the banks count on. The defendant being unable to afford to defend themselves.

Here is an excellent example of what happens when a litigant in a lawsuit attempts to act as his own lawyer. The first thing they teach you at any law school is he who acts as his own lawyer has a fool for a client.

I have read this matter in complete detail including all the supporting documentation and I have concluded that the unnamed defendant is a complete and utter fool. There were 3 glaring errors that were committed and had they not occurred, this matter would not be at the stage that it currently is.

1. The defendant should have retained the services of legal counsel. Based on the information provided, at no time did the defendant seek out the services of professional ( paid ) legal counsel. The defendant did mention in his counterclaim about Pro Bono Legal Assistance which is supplied free of charge and that's exactly what it is worth---------nothing.
Based upon the defendant's Statement of Defence and Counterclaim, I assume that he contacted this organization for assistance and guidance in drafting his defence. Had the defendant retained professional legal counsel, the Cardholder's Agreement would have been properly explained to him and the legal ramifications and options available to the plaintiff

( CIBC ) upon default in honouring the terms and conditions set forth in the Agreement. Many of the statements made by the defendant in the Statement of Defence are ludicrous and frivoulous and have no bearing on the matter at hand.

2. The law firm of Goodman and Griffen, lawyers for the plaintiff ( CIBC ), sent a covering letter together with a Financial Assessment Capacity Form requesting the defendant complete the form and return it to the lawyers by July 20, 2011. The letter was dated July 6, 2011 and due to a labour dispute ( mail strike ), this form was not received by the defendant until July 15, 2011. The letter also stated that if the defendant had any issues or concerns ( I'm paraphrasing ) to contact the law firm. If the defendant was unable to meet the July 20, 2011 deadline for submission of the form, a simple phone call to the law firm requesting an extension of this date could have been made. The defendant chose not to contact the law firm. Instead, the plaintiff responded in writing stating that he was not prepared to submit this form and reveal all his personal financial matters and that CIBC had much financial information already on file and the completion of this form was unnecessary. The law firm, in my view, was prepared to negotiate a suitable financial arrangement which would be mutually acceptable to both the CIBC and the defendant but was unable to do so without the proper completion of the form from which to negotiate. Again, had this form been submitted to the law firm, I'm convinced that a monthly payment could have been arranged suitable to both parties.

3. Based upon receipt of the letter from the defendant indicaing that the Financial Capacity Assessment Form would not be forthcoming, the law firm then decided to proceed with a lawsuit by issuing a Statement of Claim in the Milton, Ontario Superior Court of Justice. The Statement of Claim was issued on September 27, 2011 and the defendant received it on October 2, 2011. Under the Rules of Procedure of the Courts of Justice Act, a defendant has 20 days to file a Statement of Defence. This means that the Statement of Defence, if filed, would have had to be received at the Superior Court of Justice by October 22, 2011. If a Statement of Defence is not filed by this date, the plaintiff ( CIBC ) can make an application to the court for a Default Judgment. The Statement of Defence was dated October 31, 2011 There was no date given as to when the court received the Statement of Defence. The law firm , Goodman and Griffen, acting on behalf of their client, CIBC, would have contacted the court to determine if a Statement of Defence was filed by October 22, 2011. Upon determining that no Statement of Defence had been filed by that date, they then would have requested a Default Judgment of which, an award would have been made. Upon receiving the Default Judgment, a further application would have been made immediately for a Writ of Execution for the Seizure and Sale of Real Property. A Writ would then have been issued, and then given to the Sheriff to register against the real property.

In summary, there is now a Writ of Execution against the real property ( personal residence ) of the defendant. In order to stay ( temporarily postpone ) the Default Judgment and hence the Writ of Execution, the defendant will now have to file a Motion with the judge of the Superior Court of Justice and be prepared to submit very convincing arguments as to why the Default Judgment should be stayed. The law firm will also present arguments to the judge as to why the Default Judgment should not be stayed. It's an uphill battle, and unless the defendant can present overwhelmingly convincing arguments as to why the Default Judgment should be stayed, from my experience, most applications fail.

What can be learned from this matter? Had the defendant complied with the request for a completed Financial Capacity Assessment, I believe this matter could have been settled at this point. Failing this, had the defendant timely filed a Statement of Defence, the matter would have now gone to a mandatory Pre-Trial Settlement Conference where both litigants could have resolved their differences and probably saved huge legal fees. As it currently stands, additional legal fees will have to be expended together with substantial court time if this Default Judgment is to be stayed. With a Writ of Execution registered against the property, it will now be impossible to refinance any existing mortgage or to sell the property until the Writ of Execution ( lien ) has been paid. In addition, the judgment obtained will now appear on the Credit Report and will remain there for 6 years, even if the defendant is able to have the Writ removed by a court order. Also, the Credit Score of the defendant will now take a major "hit".

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Educating one Consumer at a time .

If you are a homeowner and have unsecured credit cards read this:

www.CIBCLawsuit.com