Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on whether the defendant was personally liable for a credit card debt exceeding $56,000.

• The defendant’s card was issued without her application or explicit consent, raising questions about her legal status under the agreement.

• RBC argued that long-term use of the card and joint account statements implied co-borrower liability.

• The court analyzed the terms of the credit card agreement, distinguishing between “Authorized User” and “Co-borrower.”

• No signed documentation or consent from the defendant existed to support co-borrower status.

• The court found no genuine issue requiring trial and dismissed RBC’s claim regarding the credit card balance.

Facts and outcome of the case

Background and credit card account history
The Royal Bank of Canada (RBC) brought a claim against Karen Lee Kerby, seeking over $56,000 in credit card debt allegedly owed by her. The credit card account in question was originally opened in 2003 by her husband, Robert Kerby. RBC later issued a secondary card in the defendant’s name, allegedly without her knowledge or consent, as part of a promotion. She did not sign any agreement or application. The defendant used the card for years, assuming it was a secondary spousal card under her husband's account.

Statements from RBC often listed both names—Robert Kerby as “Primary” and Karen Kerby as “Co-Applicant”—but the terms “Co-Applicant” or “Primary” were not defined in the actual credit card agreement. Over time, the credit limit was increased several times, yet there was no evidence that Karen provided consent for these increases.

In 2023, Robert Kerby made a consumer proposal under the Bankruptcy and Insolvency Act, which was accepted by creditors including RBC. Shortly after, RBC re-issued the card statement naming Karen Kerby as the “Primary” cardholder and demanded payment from her after canceling the card.

Legal position of the parties
RBC pursued summary judgment, asserting that Karen was liable for the entire credit card balance as a co-borrower. In contrast, Karen denied any liability, maintaining she was only an authorized user and had no contractual obligation to repay the debt. Both parties filed motions for summary judgment.

Court’s analysis and decision
The court reviewed the credit card agreement and determined that an “Authorized User” is not liable for the debt, even if they use the card. Key provisions required explicit consent from a co-borrower for credit limit increases and joint disclosure arrangements, both of which were absent in this case. RBC’s evidence failed to show that Karen had ever applied for the card, consented to its issuance, or agreed to be jointly responsible for the debt.

The court found that the defendant was an Authorized User, not a co-borrower, and therefore not liable for the balance. RBC’s motion was dismissed, and judgment was granted in favor of the defendant.

Costs
The issue of costs was not decided. The court encouraged the parties to resolve the matter independently. If they cannot agree, a timeline was set for written submissions.