B.C. widow not liable for late husband's $51K credit card bill, court rules

The Visa logo is seen on a credit card in this file photo. (Primakov / Shutterstock.com)

The B.C. Supreme Court has dismissed the Royal Bank of Canada's attempt to force a widow to pay her late husband's credit card bill, which had risen to more than $51,000 since his death.

RBC brought a lawsuit against Carol Smith, seeking an order that would force her to pay the outstanding balance, plus interest, on a Visa credit card account that belonged to her husband Alfred Smith, who died in June 2019.

The bank argued that the 74-year-old widow had been approved as a co-applicant when her husband first applied for the card back in 2001, and therefore was bound by the bank's cardholder agreement.

Moreover, the bank argued, Carol had accepted the agreement's terms by using her card – which was linked to her husband's account – to make purchases, something she acknowledged doing, but only "rarely," according to Justice Lindsay M. Lyster's decision, which was issued earlier this week.

In her defence, Carol argued that she never applied for the card and never agreed to the terms of the cardholder agreement. She told the court she used her card believing she was an "authorized user" of her husband's account, and that he was solely responsible for all balances.

To support its position, RBC referred the court to credit card statements mailed to the Smiths from 2014 through 2019. These documents were addressed to both Carol and Alfred, listing him as the "primary" cardholder and her as a "co-applicant."

The bank also noted that the credit limit on the account was raised several times over the years, and the cardholder agreement states that credit limits cannot be raised without the cardholder's expressed consent.

No application provided

The key question in the case, according to the judge, was whether Carol was a co-applicant for the account, or merely an authorized user. If she were the former, then the cardholder agreement would apply to her, while if she were the latter it would not.

The original application for the card was not entered as evidence in the case, and this absence weighs against the bank in Lyster's decision.

"It must be remembered that the Bank is the plaintiff in this case, and bears the burden of proving that Mrs. Smith was a co-applicant," the decision reads. "The Bank has failed to produce the application for the credit card, despite being requested to do so."

The decision goes on to note that the bank's representative in the case had no personal knowledge of who applied for the card.

"All she can do is make assumptions or inferences based on the credit card statements … and the bank’s usual practice," the decision reads.

While the bank's representative conceded that it was possible that Carol was issued her card as an authorized user, she argued this was not the case because none of the account statements referred to Carol by that term.

Lyster was unpersuaded by this argument.

"The fact Mrs. Smith had statements addressed to her does not establish that she was a co-applicant," the judge's decision reads.

"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."

Likewise, though the cardholder agreement states that, by using the card, one accepts its terms, Lyster noted that past court cases have held that such "onerous" clauses must be brought to the attention of the person subject to them in order to take effect.

"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," the decision reads.

For these reasons, Lyster dismissed the bank's lawsuit and awarded court costs to Carol.