Executive Summary: Key Legal and Evidentiary Issues

• The court upheld the Bank of Montreal’s calculation of post-default interest based on its prime rate, compounded monthly, with rate changes taking effect immediately.

• The defendants' affidavit evidence, primarily from a non-party (Mr. Meyer), was deemed largely inadmissible due to exceeding page limits, hearsay, irrelevance, and lack of factual foundation.

• Allegations of intentional misconduct and contempt of court by the plaintiff were dismissed as unsubstantiated and based on corrected clerical errors.

• Challenges to the plaintiff’s interest calculation, including arguments on compounding frequency and alleged mathematical errors, were all rejected.

• The court ruled that past errors in account statements or an alleged refusal to accept payments were irrelevant to the summary judgment interest calculation.

• Judgment was granted for $418,485.34 as of December 10, 2024, with further interest accruing under statutory provisions.

Background and summary judgment

This case involved a debt collection claim brought by the Bank of Montreal ("the plaintiff") against Alexandra Jen-Yi Lee and Kwei-Lan Liao ("the defendants") in relation to a Homeowner Readiline line of credit account. On November 19, 2024, the plaintiff sought summary judgment. The court issued reasons for judgment on December 10, 2024, concluding that the plaintiff had established a prima facie case that the defendants owed a debt of $352,490.79 as of February 11, 2022. However, the court found that there was insufficient evidence to calculate the accrued interest and allowed the parties to make further written submissions limited in scope and length.

Submissions on interest calculation

The plaintiff submitted the Affidavit of Jocelyn Sauvé, a corporate representative, which provided detailed interest calculations based on the plaintiff’s fluctuating prime rate from February 11, 2022 to December 10, 2024. Interest was calculated at $65,994.55, bringing the total claim to $418,485.34. The affidavit explained and documented how interest rate changes were accounted for when they occurred mid-month and confirmed that compounding was done monthly in accordance with the loan agreement.

The defendants submitted an affidavit from Aaron Meyer, the spouse of one of the defendants. The affidavit was 54 pages long, far exceeding the page limit imposed by the court. The court found most of Mr. Meyer’s evidence inadmissible due to irrelevance, hearsay, improper legal argument, and non-compliance with court directions. The defendants alleged that the plaintiff had intentionally violated the court’s earlier order, manipulated interest calculations for profit, and refused payment attempts. They also challenged various technical aspects of the plaintiff’s calculations.

Court’s findings and outcome

Justice Latimer dismissed all of the defendants’ objections. The court ruled that the plaintiff's method of calculating interest, including how mid-month rate changes were handled and how compounding was applied, complied with the terms of the credit agreement and the court's directions. The supposed “mathematical impossibilities” in the plaintiff’s calculations were found to be baseless. The court further clarified that the plaintiff’s corrected offer made during settlement discussions was not part of the evidence on which judgment was based.

The defendants' claim of intentional misconduct by the plaintiff was rejected, as no willful breach of court orders was established. Similarly, arguments about errors in historical account statements or refusal to accept payments were deemed irrelevant.

The court entered judgment for the Bank of Montreal in the amount of $418,485.34 as of December 10, 2024, and awarded post-judgment interest pursuant to section 7 of the Court Order Interest Act. The plaintiff was also awarded costs at scale B.