Success!! - Suing Equifax Canada Inc in small claims court in Saskatchewan - Canada!
I found this judgement in the canlii.org website.
Leslie Kenneth Neil vs Equifax Canada Inc
CONCLUSION
[38] The Plaintiff is awarded damages as follows:
1. $448.00 for loss of billable hours;
2. $4,500.00 as punitive or exemplary damages;
3. $50.00 as costs of issuing the summons.
This is by far some of the most exciting news I've seen in a very long time with regards to credit repair in Canada!!
I've been told repeatedly that you cannot sue Equifax Canada or TransUnion Canada in small claims court and that it's the jurisdiction of Consumer Protection...
It has taken a smart lawyer like Leslie Kenneth (Ken) Neil to get the job done. Ken Neil is my new hero!
Neil v. Equifax Canada Inc., 2005 SKPC 105 (CanLII)
PDF Format
Date: 2005-10-31
Parallel citations: (2005), 271 Sask. R. 160
URL: http://www.canlii.org/en/sk/skpc/doc/2005/2005skpc105/2005skpc105.html
Reflex Record (noteup and cited decisions)
Noteup
[Search for decisions citing this decision]
Decisions cited
* Haskett v. Equifax Canada Inc., 2003 CanLII 32896 (ON C.A.) ¡ª (2003), 63 O.R. (3d) 577 • (2003), 224 D.L.R. (4th) 419
2005 SKPC 105
IN THE PROVINCIAL COURT OF SASKATCHEWAN
SMALL CLAIMS COURT
AT UNITY, SASKATCHEWAN
LESLIE KENNETH NEIL
Plaintiff
- and -
EQUIFAX CANADA INC.
Defendant
Ms. Suzanne Jeanson For The Plaintiff
Ms. Debbie McCartney For The Defendant
D. J. O¡¯Hanlon, PCJ JUDGMENT
October 31, 2005
Introduction
1 The Plaintiff, Leslie Kenneth Neil (Neil), is a barrister and solicitor carrying on practise in Unity, Saskatchewan. The Defendant, Equifax Canada Inc. (Equifax), is a national credit reporting agency licenced to carry on business in Saskatchewan.
2 Neil alleges that Equifax reported false information of a judgment against Neil to the Saskatoon Credit Union Ltd. Neil further alleges that he notified Equifax of the error, and Equifax did not forthwith delete the information from Neil¡¯s file and notify Neil in writing of the deletion, as the Defendant is required to do pursuant to The Credit Reporting Agencies Act. As a result of Equifax¡¯s negligence and breach of its statutory duties, Neil claims:
a) Damages for emotional distress and embarrassment;
b) Loss of billable hours in the amount of $448.00;
c) Punitive damages; and
d) Costs available under The Small Claims Act.
FACTS
[3] In April of 2004, Neil applied for an investment with a company based in Saskatoon. Financing for this investment was offered through the Saskatoon Credit Union Ltd.(the Credit Union). On April 27, 2004, Neil applied for financing from the Credit Union. On April 29, 2004, Neil spoke by telephone with Candice from the Credit Union. He was advised that his application for financing was declined due to a judgment being registered against him. Equifax had advised the Credit Union that Neil had a judgment registered against him in Winnipeg Court of Queen¡¯s Bench in favour of Grant¡¯s International Inc. Neil knew that he did not have any judgments against him. He further knew that he had represented a client against whom Grant¡¯s International had successfully sued and obtained judgment in Court of Queen¡¯s Bench in Winnipeg, Manitoba. This judgment was a default judgment dated December 18, 2002. Knowing this, Neil asked for and received a contact number for Equifax, so that he could rectify the problem. After several attempts to contact someone from Equifax, Neil was able to get a hold of a representative. Neil advised the Equifax representative of the situation, including the fact that he had a copy of the judgment in favour of Grant¡¯s International Inc. on the client¡¯s file in his office. Neil then obtained a reference number and a fax number for Equifax. He was told by the Equifax representative that it would take eight working days to clear Neil¡¯s record once Equifax received the material.
[4] On April 29, 2004, Neil faxed a letter to Equifax, with a copy of the above judgment enclosed. He also sent a copy of the letter and the judgment to Candice at the Credit Union. The letter is as follows:
Re: Leslie Kenneth Neil
(Neil¡¯s Social Insurance Number is then quoted)
I learned today of a Judgment noted on my credit file in favour of Grants International Inc. The file number noted on the Judgment, a copy of which I enclose, is that which your company representative quoted to me as the reference number on your file (File No. Cl 02-01-29962). You will note that I am not named on the Judgment , in any way, shape or form.
I did happen to act as legal counsel for the Defendant. If that is the means by which I end up with a judgment noted on my personal record, a lot of lawyers are going to be surprised. I demand that this entry be stricken from my record immediately. Should this corrective action take the eight days your company representative said it would, your firm can expect a court summons shortly after.
Please fax immediately upon this matter being resolved.
[5] The Judgment sent with the above letter, and which is Exhibit P-2 on this hearing, contains the same file number quoted in the letter. The judgment is against a named company and a named individual, other than Neil. As stated in the above letter, Neil¡¯s name appears nowhere on the judgment.
[6] On May 6, 2004, Neil again spoke with Candice at the Credit Union. She advised that there was no change, and she would do another Equifax search the next week to see if the judgment against Neil was removed.
[7] On May 12, 2004, Neil again spoke by phone with Candice at the Credit Union. She advised that she had received nothing from Equifax and that a check by her with Equifax showed that the judgment against Neil still appeared on his file. On that same day, Neil again contacted Equifax by phone. Neil spoke with Enya at Equifax. After explaining the situation to her, she requested that Neil re-fax the material to her attention and she would give it to her supervisor.
[8] Later on May 12, 2004, Neil faxed the following letter to Enya at Equifax, with a copy to Candice at the Credit Union:
I enclose herein the following:
1) My fax correspondence to your company of April 29, 2004;
2) A copy of the default judgment referred to therein;
3) A photocopy of my driver¡¯s license showing my mailing address.
(A paragraph is then inserted correcting his residential address.) The letter continues:
Subsection 25(2) of the Saskatchewan Credit Reporting Agencies Act states as follows:
¡°Where, after the investigation, any information in the file respecting the consumer is found to be inaccurate or can no longer be verified, the agency shall forthwith delete the information from the file and shall notify the consumer in writing of the deletion.¡±
This section has not been complied with.
Furthermore, Subsection 18(e) states as follows:
¡°No credit reporting agency shall include in a credit report:
(e) any investigative information unless reasonable efforts have been made to corroborate the information.¡±
In view of the circumstances, no one at your agency could possibly have complied with this section.
I look forward to receiving the required notification by fax.
[9] On May 20, 2004, Neil telephoned the Credit Union only to find out that Candice was away until May 25, 2004. He then telephoned Equifax and left a voice message requesting a copy of his credit report. He then called the Consumer Affairs office of Consumer Protection and left a message for them to call back.
[10] On May 21, 2004, Neil again telephoned Equifax requesting a copy of his credit report. In doing so, he was requested to forward information to them. As a result, Neil faxed a letter to Equifax that day enclosing his full legal name, current residential address, mailing address, former residential address, date of birth, social insurance number and three pieces of identification.
[11] On May 21, 2004, Neil received a letter by regular mail from Equifax containing his personal credit file as of May 13, 2004. This credit file did not contain the judgment against Neil previously noted above. Since Neil had inquired on May 12, 2004, and his credit file still contained the noted judgment against him, I find that Equifax corrected the error on either May 12 or May 13, 2004.
[12] On June 8, 2004, the company Neil was seeking to invest in, contacted him to inquire if he had received financing from the Credit Union. That same day, Neil telephoned Candice at the Credit Union who in turn requested another credit check on Neil from Equifax. Candice confirmed with Neil that the judgment against Neil had been purged from his credit file. Neil was then granted financing and obtained the investment he was seeking.
[13] Neil candidly admits that he did not suffer any financial loss with regards to the financial investment as a result of the delay in financing. He does however claim a financial loss as he spent time during office hours rectifying the error on his credit file. He reports his loss at $448.00. This he says is calculated on the hourly rate he usually charges on general matters. He states that he has calculated it very conservatively at two point eight hours. I find that this is a conservative calculation and is a fair calculation in the circumstances. Neil further testified that he had to carry out his inquiries during office hours as he was in contact with the Credit Union, which is not open for business after hours. He further stated that even if the inquiries or other work he expended in rectifying this problem was carried out after hours, this could have cut into his other work as a lawyer, as he often works after hours. Also, any work he would have done on this file after hours would have taken him away from his family.
[14] The only witness for Equifax, was Paul Lefevre, their national customer service manager. Mr. Lefevre has nine years experience in this position. In his evidence, he began by highlighting the enormous amount of trade data received by Equifax, indicating that as much as ninety million pieces are received in a month. From his testimony, it is evident that much of the trade data, if not virtually all of it, is now received electronically. That has not always been the case. Although they now receive electronic reporting of default judgments from the various courts in Canada via electronic means, in December of 2002 the Court of Queen¡¯s Bench in Winnipeg was still reporting default judgments to Equifax by hard copy documentation.
[15] In December of 2002, Equifax received a Judgment Report from the Court Registry System in Manitoba. This fifteen page document contained judgments registered in the Manitoba Court¡¯s of Queen Bench from December 15, 2002 to December 21, 2002. On page 5 of that report, the third of four entries appeared as follows:
File #
C102-01-29962
19-Dec-2002
Against
KEL-CONSTRUCT FARN LTD
C/O HEPTING & NEIL
BARRISTERS &SOLICITORS
206-2ND AVE W
P O BOX 600
UNITY SK S0K4L0
ATTN: KEN NEIL
For
GRANTS INTERNATIONAL INC
86 PRINCESS ST
WPG MB
Judgment 8,690.99
Cost and Interest $803.96
[16] The entry was then manually entered by typing the information into the Equifax computer system. Mr. Lefevre admits that an employee of Equifax did make an error when inputting the information, as the judgment was input as being against Ken Neil instead of Kel-Construct Farm Inc. This judgment was entered onto the Equifax computer the day after they received the Judgment Report from the Manitoba Court Registry System. At the time of inputting the information, Equifax had in place a quality control process whereby Mr. Lefevre states that newer employees were checked 100% of the time while other employees are checked at a rate of about 25 %. The employee would have been inputting about 250 entries per day, according to Mr. Lefevre.
[17] Mr. Lefevre went on to say when a dispute is received from a consumer, Equifax will investigate the dispute, and if confirmed, they will remove the information and send a revised report out to the consumer. They do not correct the information immediately, but rather they verify with the originating source before correcting.
[18] In the case of Neil¡¯s complaint, Equifax received his complaint on April 29, 2004. The complaint then went into a queue to be dealt with in turn. On May 13, 2004, Equifax contacted the Manitoba Court Registry and confirmed that Neil¡¯s complaint was legitimate. They then changed his credit file and sent a copy of his new credit report to him on the same day, May 13, 2004. This new credit report was sent out by ordinary mail and received by Neil on May 21, 2004.
[19] As part of Equifax¡¯s defence, Mr. Lefevre emphasized that there were only eleven business days between the receipt of Mr. Neil¡¯s complaint and the correcting of the error and subsequent mailing of his new credit report. Mr. Lefevre also tendered into evidence two letters that showed Neil had received loans from other financial institutions during the time he had a judgment against him incorrectly noted on his credit file. The first letter from The National Bank of Canada, dated September 13, 2005, confirms that Neil obtained an RRSP loan from them on February 27, 2004. This letter confirms as well that the National Bank accessed the Equifax Canada consumer credit file on Neil, with Neil¡¯s consent, prior to processing his application for the loan.
[20] The second letter is from Resort Funding LLC out of Syracuse, New York. The letter dated April 28, 2005, states as follows:
This letter is in response to your fax request. Please accept this letter as confirmation that Kenneth Neil of Box 128, Unity, SK S0K 4L0 successfully obtained mortgage financing with Resort Funding LLC on April 01, 2004.
[21] Under cross examination, Mr. Lefevre admitted that the information first received from the Manitoba court registry, was incorrectly entered on Mr. Neil¡¯s credit file the day following its receipt. He further admitted that once the error was brought to their attention, they do not immediately correct it. Instead, they verify with the source of the information that it is in fact an error. Once verified they simply send out a corrected credit report via ordinary mail to the person who is the subject of the error. There was no evidence that Equifax ever contacted the three financial institutions that had been provided the wrong information about Neil¡¯s credit. Yet, it is abundantly clear that Equifax had contact with the two institutions that had given Neil credit even though his credit report had incorrect information on it. Also, with regard to the Credit Union, Equifax knew, or had the ability to know, that Neil was applying for credit from them, and that Equifax had provided incorrect information to the Credit Union regarding a judgment against Neil. Yet, again there is no evidence that Equifax sent any correction to the Credit Union once they had corrected Neil¡¯s credit file.
DUTY OF CARE
[22] The first issue to be determined is whether Equifax owed a duty of care to Neil with regard to his credit file. In the case of Haskett v. Equifax Canada Inc. et al. 2003 CanLII 32896 (ON C.A.), (2003), 63 O.R. (3d) 577 the Ontario Court of Appeal held that there was a duty of care between a credit reporting agency and the individual on whom they are reporting. At page 589 of that case, Mr. Justice Feldman states:
The relationship between the credit reporting agency and the appellant is that he is the subject of one or more credit reports prepared and published by the respondents. It is the respondents that have chosen to provide information about the appellant to third party credit grantors. It is reasonably foreseeable that if the respondents are negligent in the way they gather and report information, and if they report inaccurate information, their actions could cause credit grantors to either deny credit or to charge more than they otherwise would. To the extent that a person such as the appellant authorizes, either expressly or impliedly, the gathering and reporting of credit information ... it is fair to say that any such authorization would normally be limited to accurate and non-negligent reporting.
[23] On the basis of the above, I find that Equifax did owe a duty of care to Neil to report accurate credit information to credit grantors. Further, even though Equifax had quality control measures in place at the time they mistakenly applied a judgment against Neil¡¯s credit report, these were not sufficient as Equifax has admitted that an error occurred. I therefore find as well that Equifax breached their duty of care to Neil when they mistakenly reported a judgment outstanding against him.
LIABILITY AND DAMAGES
i) Claim For Emotional Distress And Embarrassment
[24] Neil¡¯s first claim for damages is for emotional distress and embarrassment. In this regard, Neil testified that Candice, from the Saskatoon Credit Union, told him right from the beginning that the judgment was a bar to him obtaining financing from their institution. She was accusatory at first, however, she did display patience and understanding as Neil sent copies of all correspondences to her as he tried to rectify the situation. Neil knew right from the beginning that he did not have a judgment against him however, he had to prove this both to Equifax and to the Saskatoon Credit Union. At first he found this bothersome, but as time went on he understandably became angry as he became concerned for his financial reputation with the Credit Union and the investment company he was attempting to invest with.
[25] With regards to the investment Neil was attempting to obtain financing for, he candidly admits that he did not suffer any financial loss as a result of the delay in financing occasioned by Equifax¡¯s error and the time it took Equifax to correct their error. He did however suffer loss as a result of the time he had to expend in correcting the error. This will be dealt with under the next head of damages.
[26] With regard to the two other financial institutions - The National Bank of Canada and Resort Funding LLC - that had been supplied inaccurate information about Neil¡¯s credit rating by Equifax, it is indeed possible that Neil paid a greater rate of interest than he would have had they not been incorrectly advised of the inaccurate information. This however has not been proven and any award for damages for loss of actual money in this regard would be speculative at best.
[27] While Neil did testify that he found the whole ordeal bothersome and embarrassing, he was and is a trained lawyer with many years of experience. He dealt with this situation in a logical and systematic fashion and eventually achieved most of what he had set out to do. There is no doubt, that it caused him some amount of stress and anxiety, as this was a personal situation, however, given his training and experience and his actions, I am satisfied that even if it were possible to quantify the damages for this, they would be nominal at most.
[28] Although Neil¡¯s claim in this area is only for emotional distress and embarrassment I am satisfied that this area of damages also encompasses a claim for loss of financial reputation. As I have already stated, as time went on, Neil became angry due to his concern for his financial reputation. Damages for loss of reputation however, are usually awarded in defamation cases, where the plaintiff has pleaded defamation: Clark v. Scotia Bank, [2004] O.J. No. 2615. A plaintiff can, however, succeed on a non-defamation claim for loss of reputation where monetary loss has been proven: Clark v. Scotia Bank, supra. As I have stated, however, no monetary loss arising from the loss of reputation has been proven.
ii) Claim For Loss Of Billable Hours
[29] Neil¡¯s next claim is for loss of billable hours in the amount of $448.00. I am satisfied that this claim is made out. He provided details of his hourly billing rate on general matters and calculated in a very conservative fashion the amount of time he spent rectifying Equifax¡¯s error. He further testified that he gave this matter priority and dealt with it in an urgent fashion during office hours. Equifax argued that he could have dealt with the matter on his personal time and therefore not incurred the loss of billable hours. I am satisfied their argument fails for several reasons. First, the situation arose as a result of Neil¡¯s occupation. He had represented the company against whom the judgment was reported in the first place. He was therefore entitled to rectify it during office hours. Secondly, the steps taken to rectify the situation had to be taken, for the most part, during business hours. Thirdly, and perhaps most importantly, I would have awarded at least this amount for Neil¡¯s loss of personal time with his family, had he have spent his off hours dealing with Equifax¡¯s mistake.
iii) Claim For Punitive Damages
[30] Damages are usually awarded to compensate for a plaintiff¡¯s loss. The purpose of an award of damages is to attempt to place the plaintiff in the position in which he or she would have been had the loss not occurred. Punitive or exemplary damages on the other hand are awarded against the perpetrator of improper conduct to denounce such conduct and effect deterrence in the future: McCaslin v. Biden,[2002] S.J. No. 763 (Sask Q.B.). In Waddams, The Law of Damages (2nd ed. 1983), at page 562 the distinction is set out as follows:
An exception exists to the general rule that damages are compensatory. This is the case of an award made for the purpose, not of compensating the Plaintiff, but of punishing the Defendant. Such awards have been called exemplary, vindictive, penal, punitive, aggravated and retributory, but the expressions in common modern use to describe damages going beyond compensatory are exemplary and punitive damages. ¡°Exemplary¡± was preferred by the House of Lords in Cassell & Co. Ltd. v. Broome, but ¡°punitive¡± has also been used in many Canadian courts including the Supreme Court of Canada in H.L. Weiss Forwarding Ltd. V. Omnus. The expression ¡°aggravated damages¡±, though it has sometimes been used interchangeably with punitive or exemplary damages, has more frequently in recent times been contrasted with exemplary damages. In this contrasting sense, aggravated damages describes an award that aims at compensation, but takes full account of the intangible injuries, such as distress and humiliation, that may have been caused by the Defendant¡¯s insulting behaviour. The expressions vindictive, penal and retributory have dropped out of common use.
[31] In this case, Equifax states that it adhered to the requirements of Section 25 of The Credit Reporting Agencies Act of Saskatchewan, as they corrected the error within eleven business days, which they contend is a reasonable time. Section 25 reads as follows:
25(1) Where a consumer disputes the completeness or accuracy of any information respecting the consumer contained in the file of a credit reporting agency and gives notice thereof in writing to the agency, the agency shall within a reasonable time investigate and record the current status of that information.
(2) Where, after the investigation, any information in the file respecting the consumer is found to be inaccurate or can no longer be verified, the agency shall forthwith delete the information from the file and shall notify the consumer in writing of the deletion.
(3) Where, after the investigation, the credit reporting agency is of the opinion that the information in the file respecting the consumer is reasonably accurate and should not be deleted, the agency shall forthwith request the consumer to file a brief statement setting forth the nature of his dispute respecting the information.
(4) Where a statement of dispute is filed by a consumer pursuant to a request under subsection (3), the credit reporting agency shall, in any subsequent credit report containing the information in respect of which the dispute was filed, clearly note that the information is disputed by the consumer and attach to the credit report a copy of the consumer¡¯s statement or a clear and accurate summary thereof.
(5) Where:
(a) a credit reporting agency deletes information from the file respecting a consumer; or
(b) a statement of dispute is filed with a credit reporting agency by a consumer under this section;
the credit reporting agency shall forthwith notify every person to whom a credit report respecting the consumer was furnished during the twelve months immediately preceding of the deletion of the information or the details of the dispute, as the case may be.
[32] I find that Equifax breached this section of the Act in two ways. Firstly, Equifax had been contacted by Neil by phone in the first instance, complaining of an error on his credit report. He was requested to, and did, forward documents by fax to Equifax. In fact, he did this on two separate occasions. The second time, when he was following up on his initial complaint, he was requested by Enya to fax the material again so that she could put it before her supervisor. There is no explanation as to why the first set of documents was not acted upon. When Equifax did finally rectify their mistake, they knew, or ought to have known, that Neil was in the process of obtaining financing. Yet Equifax chose to forward his corrected credit report to him by regular mail rather than by fax. This took from May 12 or 13, 2004, until May 21, 2004. They did this even though Neil had requested immediate faxed replies in both of the letters he faxed to Equifax. Consequently, I find that Equifax did not forthwith delete the information from Neil¡¯s file and notify him within a reasonable period of time.
[33] Further to the above, the evidence from Equifax was that all complaints are put into a queue to be dealt with in turn, and that it was miraculous that it only took eleven business days, does not exonerate them in any fashion. They had received documents from Neil, in the form of a copy of the judgment resulting in the notation on his credit file. These documents alone should have resulted in an immediate change to his credit file. Equifax¡¯s assertion that they cannot simply take the word of a consumer, but rather they need to verify with the source of the information before they can make the change, does not justify the delay. This is especially so in light of the fact that the erroneous entry was placed on Neil¡¯s credit file the day after Equifax received the information from the Manitoba Court Registry. Indeed, Equifax needs to expend at least as much time, energy and resources correcting their errors as they do in initially making notations on consumer files. Otherwise, their contentions of miraculous actions ring hollow.
[34] The second breach of Section 25 occurred when Equifax did not contact the Saskatoon Credit Union, The National Bank of Canada and Resort Funding LLC, as they were required to do by subsection (5). In the case of the Credit Union, on June 8, 2004, Neil was contacted by the investment company he intended to invest with, inquiring if he was going to get credit to finance the investment. This was almost a month after Equifax had found their error and made the change to Neil¡¯s credit report. After hearing from the investment company, Neil then contacted the Credit Union and they in turn contacted Equifax for another credit check on Neil. It was only then that the Credit Union was advised of the deletion of the erroneous information on Neil¡¯s credit file. They were not notified forthwith by Equifax as required by this subsection. Equifax neglected to do this even though, as I have stated earlier, they knew, or ought to have known, that Neil was in the midst of attempting to obtain financing from the Credit Union. With regard to The National Bank of Canada, their letter of September 13, 2005, to Equifax, indicates that they had accessed Neil¡¯s credit file at Equifax on February 25, 2004, and had granted him a loan on February 27, 2004. This is within twelve months immediately preceding the deletion of the erroneous information as contemplated by subsection (5). Equifax therefore had a duty to show that they had notified the National Bank. They did not do so. Instead, they used correspondence from the National Bank to support their case that Neil did not suffer as a result of their negligence.
[35] The same holds true in respect of Resort Funding LLC. They granted a loan to Neil on April 1, 2004, after accessing credit information about him from Equifax. Once again, Equifax offered no proof of their compliance with subsection (5). And once again, they used correspondence from this financial institution to support their case.
[36] I view the conduct of the Defendant to be high-handed, callous and reckless as to the duty it owes to the person it reported on. Further, the Defendant acted without consideration of the requirements of the statute.
[37] Considering all of the above, I am satisfied that this is a proper case to award damages under this head of damages and I do so in consideration of the improper conduct displayed by Equifax, to denounce such conduct and to effect deterrence in the future. In order to achieve these ends, I am satisfied the amount of the award has to be sufficiently great. On the other hand, I am limited to the amount presently allowable under The Small Claims Act, 1997. I therefore award the Plaintiff $4,500.00 under this head of damages. Although this amount, together with the award for other damages, is very close to the allowable limit, I am satisfied that this amount is warranted. The Defendant is a large national credit reporting agency that handles 90 million pieces of trade data per month. Any lesser amount would not have the desired effect on their conduct.
CONCLUSION
[38] The Plaintiff is awarded damages as follows:
1. $448.00 for loss of billable hours;
2. $4,500.00 as punitive or exemplary damages;
3. $50.00 as costs of issuing the summons.
________________________
D. J. O¡¯Hanlon, PCJ
I found this judgement in the canlii.org website.
Leslie Kenneth Neil vs Equifax Canada Inc
CONCLUSION
[38] The Plaintiff is awarded damages as follows:
1. $448.00 for loss of billable hours;
2. $4,500.00 as punitive or exemplary damages;
3. $50.00 as costs of issuing the summons.
This is by far some of the most exciting news I've seen in a very long time with regards to credit repair in Canada!!
I've been told repeatedly that you cannot sue Equifax Canada or TransUnion Canada in small claims court and that it's the jurisdiction of Consumer Protection...
It has taken a smart lawyer like Leslie Kenneth (Ken) Neil to get the job done. Ken Neil is my new hero!
Neil v. Equifax Canada Inc., 2005 SKPC 105 (CanLII)
PDF Format
Date: 2005-10-31
Parallel citations: (2005), 271 Sask. R. 160
URL: http://www.canlii.org/en/sk/skpc/doc/2005/2005skpc105/2005skpc105.html
Reflex Record (noteup and cited decisions)
Noteup
[Search for decisions citing this decision]
Decisions cited
* Haskett v. Equifax Canada Inc., 2003 CanLII 32896 (ON C.A.) ¡ª (2003), 63 O.R. (3d) 577 • (2003), 224 D.L.R. (4th) 419
2005 SKPC 105
IN THE PROVINCIAL COURT OF SASKATCHEWAN
SMALL CLAIMS COURT
AT UNITY, SASKATCHEWAN
LESLIE KENNETH NEIL
Plaintiff
- and -
EQUIFAX CANADA INC.
Defendant
Ms. Suzanne Jeanson For The Plaintiff
Ms. Debbie McCartney For The Defendant
D. J. O¡¯Hanlon, PCJ JUDGMENT
October 31, 2005
Introduction
1 The Plaintiff, Leslie Kenneth Neil (Neil), is a barrister and solicitor carrying on practise in Unity, Saskatchewan. The Defendant, Equifax Canada Inc. (Equifax), is a national credit reporting agency licenced to carry on business in Saskatchewan.
2 Neil alleges that Equifax reported false information of a judgment against Neil to the Saskatoon Credit Union Ltd. Neil further alleges that he notified Equifax of the error, and Equifax did not forthwith delete the information from Neil¡¯s file and notify Neil in writing of the deletion, as the Defendant is required to do pursuant to The Credit Reporting Agencies Act. As a result of Equifax¡¯s negligence and breach of its statutory duties, Neil claims:
a) Damages for emotional distress and embarrassment;
b) Loss of billable hours in the amount of $448.00;
c) Punitive damages; and
d) Costs available under The Small Claims Act.
FACTS
[3] In April of 2004, Neil applied for an investment with a company based in Saskatoon. Financing for this investment was offered through the Saskatoon Credit Union Ltd.(the Credit Union). On April 27, 2004, Neil applied for financing from the Credit Union. On April 29, 2004, Neil spoke by telephone with Candice from the Credit Union. He was advised that his application for financing was declined due to a judgment being registered against him. Equifax had advised the Credit Union that Neil had a judgment registered against him in Winnipeg Court of Queen¡¯s Bench in favour of Grant¡¯s International Inc. Neil knew that he did not have any judgments against him. He further knew that he had represented a client against whom Grant¡¯s International had successfully sued and obtained judgment in Court of Queen¡¯s Bench in Winnipeg, Manitoba. This judgment was a default judgment dated December 18, 2002. Knowing this, Neil asked for and received a contact number for Equifax, so that he could rectify the problem. After several attempts to contact someone from Equifax, Neil was able to get a hold of a representative. Neil advised the Equifax representative of the situation, including the fact that he had a copy of the judgment in favour of Grant¡¯s International Inc. on the client¡¯s file in his office. Neil then obtained a reference number and a fax number for Equifax. He was told by the Equifax representative that it would take eight working days to clear Neil¡¯s record once Equifax received the material.
[4] On April 29, 2004, Neil faxed a letter to Equifax, with a copy of the above judgment enclosed. He also sent a copy of the letter and the judgment to Candice at the Credit Union. The letter is as follows:
Re: Leslie Kenneth Neil
(Neil¡¯s Social Insurance Number is then quoted)
I learned today of a Judgment noted on my credit file in favour of Grants International Inc. The file number noted on the Judgment, a copy of which I enclose, is that which your company representative quoted to me as the reference number on your file (File No. Cl 02-01-29962). You will note that I am not named on the Judgment , in any way, shape or form.
I did happen to act as legal counsel for the Defendant. If that is the means by which I end up with a judgment noted on my personal record, a lot of lawyers are going to be surprised. I demand that this entry be stricken from my record immediately. Should this corrective action take the eight days your company representative said it would, your firm can expect a court summons shortly after.
Please fax immediately upon this matter being resolved.
[5] The Judgment sent with the above letter, and which is Exhibit P-2 on this hearing, contains the same file number quoted in the letter. The judgment is against a named company and a named individual, other than Neil. As stated in the above letter, Neil¡¯s name appears nowhere on the judgment.
[6] On May 6, 2004, Neil again spoke with Candice at the Credit Union. She advised that there was no change, and she would do another Equifax search the next week to see if the judgment against Neil was removed.
[7] On May 12, 2004, Neil again spoke by phone with Candice at the Credit Union. She advised that she had received nothing from Equifax and that a check by her with Equifax showed that the judgment against Neil still appeared on his file. On that same day, Neil again contacted Equifax by phone. Neil spoke with Enya at Equifax. After explaining the situation to her, she requested that Neil re-fax the material to her attention and she would give it to her supervisor.
[8] Later on May 12, 2004, Neil faxed the following letter to Enya at Equifax, with a copy to Candice at the Credit Union:
I enclose herein the following:
1) My fax correspondence to your company of April 29, 2004;
2) A copy of the default judgment referred to therein;
3) A photocopy of my driver¡¯s license showing my mailing address.
(A paragraph is then inserted correcting his residential address.) The letter continues:
Subsection 25(2) of the Saskatchewan Credit Reporting Agencies Act states as follows:
¡°Where, after the investigation, any information in the file respecting the consumer is found to be inaccurate or can no longer be verified, the agency shall forthwith delete the information from the file and shall notify the consumer in writing of the deletion.¡±
This section has not been complied with.
Furthermore, Subsection 18(e) states as follows:
¡°No credit reporting agency shall include in a credit report:
(e) any investigative information unless reasonable efforts have been made to corroborate the information.¡±
In view of the circumstances, no one at your agency could possibly have complied with this section.
I look forward to receiving the required notification by fax.
[9] On May 20, 2004, Neil telephoned the Credit Union only to find out that Candice was away until May 25, 2004. He then telephoned Equifax and left a voice message requesting a copy of his credit report. He then called the Consumer Affairs office of Consumer Protection and left a message for them to call back.
[10] On May 21, 2004, Neil again telephoned Equifax requesting a copy of his credit report. In doing so, he was requested to forward information to them. As a result, Neil faxed a letter to Equifax that day enclosing his full legal name, current residential address, mailing address, former residential address, date of birth, social insurance number and three pieces of identification.
[11] On May 21, 2004, Neil received a letter by regular mail from Equifax containing his personal credit file as of May 13, 2004. This credit file did not contain the judgment against Neil previously noted above. Since Neil had inquired on May 12, 2004, and his credit file still contained the noted judgment against him, I find that Equifax corrected the error on either May 12 or May 13, 2004.
[12] On June 8, 2004, the company Neil was seeking to invest in, contacted him to inquire if he had received financing from the Credit Union. That same day, Neil telephoned Candice at the Credit Union who in turn requested another credit check on Neil from Equifax. Candice confirmed with Neil that the judgment against Neil had been purged from his credit file. Neil was then granted financing and obtained the investment he was seeking.
[13] Neil candidly admits that he did not suffer any financial loss with regards to the financial investment as a result of the delay in financing. He does however claim a financial loss as he spent time during office hours rectifying the error on his credit file. He reports his loss at $448.00. This he says is calculated on the hourly rate he usually charges on general matters. He states that he has calculated it very conservatively at two point eight hours. I find that this is a conservative calculation and is a fair calculation in the circumstances. Neil further testified that he had to carry out his inquiries during office hours as he was in contact with the Credit Union, which is not open for business after hours. He further stated that even if the inquiries or other work he expended in rectifying this problem was carried out after hours, this could have cut into his other work as a lawyer, as he often works after hours. Also, any work he would have done on this file after hours would have taken him away from his family.
[14] The only witness for Equifax, was Paul Lefevre, their national customer service manager. Mr. Lefevre has nine years experience in this position. In his evidence, he began by highlighting the enormous amount of trade data received by Equifax, indicating that as much as ninety million pieces are received in a month. From his testimony, it is evident that much of the trade data, if not virtually all of it, is now received electronically. That has not always been the case. Although they now receive electronic reporting of default judgments from the various courts in Canada via electronic means, in December of 2002 the Court of Queen¡¯s Bench in Winnipeg was still reporting default judgments to Equifax by hard copy documentation.
[15] In December of 2002, Equifax received a Judgment Report from the Court Registry System in Manitoba. This fifteen page document contained judgments registered in the Manitoba Court¡¯s of Queen Bench from December 15, 2002 to December 21, 2002. On page 5 of that report, the third of four entries appeared as follows:
File #
C102-01-29962
19-Dec-2002
Against
KEL-CONSTRUCT FARN LTD
C/O HEPTING & NEIL
BARRISTERS &SOLICITORS
206-2ND AVE W
P O BOX 600
UNITY SK S0K4L0
ATTN: KEN NEIL
For
GRANTS INTERNATIONAL INC
86 PRINCESS ST
WPG MB
Judgment 8,690.99
Cost and Interest $803.96
[16] The entry was then manually entered by typing the information into the Equifax computer system. Mr. Lefevre admits that an employee of Equifax did make an error when inputting the information, as the judgment was input as being against Ken Neil instead of Kel-Construct Farm Inc. This judgment was entered onto the Equifax computer the day after they received the Judgment Report from the Manitoba Court Registry System. At the time of inputting the information, Equifax had in place a quality control process whereby Mr. Lefevre states that newer employees were checked 100% of the time while other employees are checked at a rate of about 25 %. The employee would have been inputting about 250 entries per day, according to Mr. Lefevre.
[17] Mr. Lefevre went on to say when a dispute is received from a consumer, Equifax will investigate the dispute, and if confirmed, they will remove the information and send a revised report out to the consumer. They do not correct the information immediately, but rather they verify with the originating source before correcting.
[18] In the case of Neil¡¯s complaint, Equifax received his complaint on April 29, 2004. The complaint then went into a queue to be dealt with in turn. On May 13, 2004, Equifax contacted the Manitoba Court Registry and confirmed that Neil¡¯s complaint was legitimate. They then changed his credit file and sent a copy of his new credit report to him on the same day, May 13, 2004. This new credit report was sent out by ordinary mail and received by Neil on May 21, 2004.
[19] As part of Equifax¡¯s defence, Mr. Lefevre emphasized that there were only eleven business days between the receipt of Mr. Neil¡¯s complaint and the correcting of the error and subsequent mailing of his new credit report. Mr. Lefevre also tendered into evidence two letters that showed Neil had received loans from other financial institutions during the time he had a judgment against him incorrectly noted on his credit file. The first letter from The National Bank of Canada, dated September 13, 2005, confirms that Neil obtained an RRSP loan from them on February 27, 2004. This letter confirms as well that the National Bank accessed the Equifax Canada consumer credit file on Neil, with Neil¡¯s consent, prior to processing his application for the loan.
[20] The second letter is from Resort Funding LLC out of Syracuse, New York. The letter dated April 28, 2005, states as follows:
This letter is in response to your fax request. Please accept this letter as confirmation that Kenneth Neil of Box 128, Unity, SK S0K 4L0 successfully obtained mortgage financing with Resort Funding LLC on April 01, 2004.
[21] Under cross examination, Mr. Lefevre admitted that the information first received from the Manitoba court registry, was incorrectly entered on Mr. Neil¡¯s credit file the day following its receipt. He further admitted that once the error was brought to their attention, they do not immediately correct it. Instead, they verify with the source of the information that it is in fact an error. Once verified they simply send out a corrected credit report via ordinary mail to the person who is the subject of the error. There was no evidence that Equifax ever contacted the three financial institutions that had been provided the wrong information about Neil¡¯s credit. Yet, it is abundantly clear that Equifax had contact with the two institutions that had given Neil credit even though his credit report had incorrect information on it. Also, with regard to the Credit Union, Equifax knew, or had the ability to know, that Neil was applying for credit from them, and that Equifax had provided incorrect information to the Credit Union regarding a judgment against Neil. Yet, again there is no evidence that Equifax sent any correction to the Credit Union once they had corrected Neil¡¯s credit file.
DUTY OF CARE
[22] The first issue to be determined is whether Equifax owed a duty of care to Neil with regard to his credit file. In the case of Haskett v. Equifax Canada Inc. et al. 2003 CanLII 32896 (ON C.A.), (2003), 63 O.R. (3d) 577 the Ontario Court of Appeal held that there was a duty of care between a credit reporting agency and the individual on whom they are reporting. At page 589 of that case, Mr. Justice Feldman states:
The relationship between the credit reporting agency and the appellant is that he is the subject of one or more credit reports prepared and published by the respondents. It is the respondents that have chosen to provide information about the appellant to third party credit grantors. It is reasonably foreseeable that if the respondents are negligent in the way they gather and report information, and if they report inaccurate information, their actions could cause credit grantors to either deny credit or to charge more than they otherwise would. To the extent that a person such as the appellant authorizes, either expressly or impliedly, the gathering and reporting of credit information ... it is fair to say that any such authorization would normally be limited to accurate and non-negligent reporting.
[23] On the basis of the above, I find that Equifax did owe a duty of care to Neil to report accurate credit information to credit grantors. Further, even though Equifax had quality control measures in place at the time they mistakenly applied a judgment against Neil¡¯s credit report, these were not sufficient as Equifax has admitted that an error occurred. I therefore find as well that Equifax breached their duty of care to Neil when they mistakenly reported a judgment outstanding against him.
LIABILITY AND DAMAGES
i) Claim For Emotional Distress And Embarrassment
[24] Neil¡¯s first claim for damages is for emotional distress and embarrassment. In this regard, Neil testified that Candice, from the Saskatoon Credit Union, told him right from the beginning that the judgment was a bar to him obtaining financing from their institution. She was accusatory at first, however, she did display patience and understanding as Neil sent copies of all correspondences to her as he tried to rectify the situation. Neil knew right from the beginning that he did not have a judgment against him however, he had to prove this both to Equifax and to the Saskatoon Credit Union. At first he found this bothersome, but as time went on he understandably became angry as he became concerned for his financial reputation with the Credit Union and the investment company he was attempting to invest with.
[25] With regards to the investment Neil was attempting to obtain financing for, he candidly admits that he did not suffer any financial loss as a result of the delay in financing occasioned by Equifax¡¯s error and the time it took Equifax to correct their error. He did however suffer loss as a result of the time he had to expend in correcting the error. This will be dealt with under the next head of damages.
[26] With regard to the two other financial institutions - The National Bank of Canada and Resort Funding LLC - that had been supplied inaccurate information about Neil¡¯s credit rating by Equifax, it is indeed possible that Neil paid a greater rate of interest than he would have had they not been incorrectly advised of the inaccurate information. This however has not been proven and any award for damages for loss of actual money in this regard would be speculative at best.
[27] While Neil did testify that he found the whole ordeal bothersome and embarrassing, he was and is a trained lawyer with many years of experience. He dealt with this situation in a logical and systematic fashion and eventually achieved most of what he had set out to do. There is no doubt, that it caused him some amount of stress and anxiety, as this was a personal situation, however, given his training and experience and his actions, I am satisfied that even if it were possible to quantify the damages for this, they would be nominal at most.
[28] Although Neil¡¯s claim in this area is only for emotional distress and embarrassment I am satisfied that this area of damages also encompasses a claim for loss of financial reputation. As I have already stated, as time went on, Neil became angry due to his concern for his financial reputation. Damages for loss of reputation however, are usually awarded in defamation cases, where the plaintiff has pleaded defamation: Clark v. Scotia Bank, [2004] O.J. No. 2615. A plaintiff can, however, succeed on a non-defamation claim for loss of reputation where monetary loss has been proven: Clark v. Scotia Bank, supra. As I have stated, however, no monetary loss arising from the loss of reputation has been proven.
ii) Claim For Loss Of Billable Hours
[29] Neil¡¯s next claim is for loss of billable hours in the amount of $448.00. I am satisfied that this claim is made out. He provided details of his hourly billing rate on general matters and calculated in a very conservative fashion the amount of time he spent rectifying Equifax¡¯s error. He further testified that he gave this matter priority and dealt with it in an urgent fashion during office hours. Equifax argued that he could have dealt with the matter on his personal time and therefore not incurred the loss of billable hours. I am satisfied their argument fails for several reasons. First, the situation arose as a result of Neil¡¯s occupation. He had represented the company against whom the judgment was reported in the first place. He was therefore entitled to rectify it during office hours. Secondly, the steps taken to rectify the situation had to be taken, for the most part, during business hours. Thirdly, and perhaps most importantly, I would have awarded at least this amount for Neil¡¯s loss of personal time with his family, had he have spent his off hours dealing with Equifax¡¯s mistake.
iii) Claim For Punitive Damages
[30] Damages are usually awarded to compensate for a plaintiff¡¯s loss. The purpose of an award of damages is to attempt to place the plaintiff in the position in which he or she would have been had the loss not occurred. Punitive or exemplary damages on the other hand are awarded against the perpetrator of improper conduct to denounce such conduct and effect deterrence in the future: McCaslin v. Biden,[2002] S.J. No. 763 (Sask Q.B.). In Waddams, The Law of Damages (2nd ed. 1983), at page 562 the distinction is set out as follows:
An exception exists to the general rule that damages are compensatory. This is the case of an award made for the purpose, not of compensating the Plaintiff, but of punishing the Defendant. Such awards have been called exemplary, vindictive, penal, punitive, aggravated and retributory, but the expressions in common modern use to describe damages going beyond compensatory are exemplary and punitive damages. ¡°Exemplary¡± was preferred by the House of Lords in Cassell & Co. Ltd. v. Broome, but ¡°punitive¡± has also been used in many Canadian courts including the Supreme Court of Canada in H.L. Weiss Forwarding Ltd. V. Omnus. The expression ¡°aggravated damages¡±, though it has sometimes been used interchangeably with punitive or exemplary damages, has more frequently in recent times been contrasted with exemplary damages. In this contrasting sense, aggravated damages describes an award that aims at compensation, but takes full account of the intangible injuries, such as distress and humiliation, that may have been caused by the Defendant¡¯s insulting behaviour. The expressions vindictive, penal and retributory have dropped out of common use.
[31] In this case, Equifax states that it adhered to the requirements of Section 25 of The Credit Reporting Agencies Act of Saskatchewan, as they corrected the error within eleven business days, which they contend is a reasonable time. Section 25 reads as follows:
25(1) Where a consumer disputes the completeness or accuracy of any information respecting the consumer contained in the file of a credit reporting agency and gives notice thereof in writing to the agency, the agency shall within a reasonable time investigate and record the current status of that information.
(2) Where, after the investigation, any information in the file respecting the consumer is found to be inaccurate or can no longer be verified, the agency shall forthwith delete the information from the file and shall notify the consumer in writing of the deletion.
(3) Where, after the investigation, the credit reporting agency is of the opinion that the information in the file respecting the consumer is reasonably accurate and should not be deleted, the agency shall forthwith request the consumer to file a brief statement setting forth the nature of his dispute respecting the information.
(4) Where a statement of dispute is filed by a consumer pursuant to a request under subsection (3), the credit reporting agency shall, in any subsequent credit report containing the information in respect of which the dispute was filed, clearly note that the information is disputed by the consumer and attach to the credit report a copy of the consumer¡¯s statement or a clear and accurate summary thereof.
(5) Where:
(a) a credit reporting agency deletes information from the file respecting a consumer; or
(b) a statement of dispute is filed with a credit reporting agency by a consumer under this section;
the credit reporting agency shall forthwith notify every person to whom a credit report respecting the consumer was furnished during the twelve months immediately preceding of the deletion of the information or the details of the dispute, as the case may be.
[32] I find that Equifax breached this section of the Act in two ways. Firstly, Equifax had been contacted by Neil by phone in the first instance, complaining of an error on his credit report. He was requested to, and did, forward documents by fax to Equifax. In fact, he did this on two separate occasions. The second time, when he was following up on his initial complaint, he was requested by Enya to fax the material again so that she could put it before her supervisor. There is no explanation as to why the first set of documents was not acted upon. When Equifax did finally rectify their mistake, they knew, or ought to have known, that Neil was in the process of obtaining financing. Yet Equifax chose to forward his corrected credit report to him by regular mail rather than by fax. This took from May 12 or 13, 2004, until May 21, 2004. They did this even though Neil had requested immediate faxed replies in both of the letters he faxed to Equifax. Consequently, I find that Equifax did not forthwith delete the information from Neil¡¯s file and notify him within a reasonable period of time.
[33] Further to the above, the evidence from Equifax was that all complaints are put into a queue to be dealt with in turn, and that it was miraculous that it only took eleven business days, does not exonerate them in any fashion. They had received documents from Neil, in the form of a copy of the judgment resulting in the notation on his credit file. These documents alone should have resulted in an immediate change to his credit file. Equifax¡¯s assertion that they cannot simply take the word of a consumer, but rather they need to verify with the source of the information before they can make the change, does not justify the delay. This is especially so in light of the fact that the erroneous entry was placed on Neil¡¯s credit file the day after Equifax received the information from the Manitoba Court Registry. Indeed, Equifax needs to expend at least as much time, energy and resources correcting their errors as they do in initially making notations on consumer files. Otherwise, their contentions of miraculous actions ring hollow.
[34] The second breach of Section 25 occurred when Equifax did not contact the Saskatoon Credit Union, The National Bank of Canada and Resort Funding LLC, as they were required to do by subsection (5). In the case of the Credit Union, on June 8, 2004, Neil was contacted by the investment company he intended to invest with, inquiring if he was going to get credit to finance the investment. This was almost a month after Equifax had found their error and made the change to Neil¡¯s credit report. After hearing from the investment company, Neil then contacted the Credit Union and they in turn contacted Equifax for another credit check on Neil. It was only then that the Credit Union was advised of the deletion of the erroneous information on Neil¡¯s credit file. They were not notified forthwith by Equifax as required by this subsection. Equifax neglected to do this even though, as I have stated earlier, they knew, or ought to have known, that Neil was in the midst of attempting to obtain financing from the Credit Union. With regard to The National Bank of Canada, their letter of September 13, 2005, to Equifax, indicates that they had accessed Neil¡¯s credit file at Equifax on February 25, 2004, and had granted him a loan on February 27, 2004. This is within twelve months immediately preceding the deletion of the erroneous information as contemplated by subsection (5). Equifax therefore had a duty to show that they had notified the National Bank. They did not do so. Instead, they used correspondence from the National Bank to support their case that Neil did not suffer as a result of their negligence.
[35] The same holds true in respect of Resort Funding LLC. They granted a loan to Neil on April 1, 2004, after accessing credit information about him from Equifax. Once again, Equifax offered no proof of their compliance with subsection (5). And once again, they used correspondence from this financial institution to support their case.
[36] I view the conduct of the Defendant to be high-handed, callous and reckless as to the duty it owes to the person it reported on. Further, the Defendant acted without consideration of the requirements of the statute.
[37] Considering all of the above, I am satisfied that this is a proper case to award damages under this head of damages and I do so in consideration of the improper conduct displayed by Equifax, to denounce such conduct and to effect deterrence in the future. In order to achieve these ends, I am satisfied the amount of the award has to be sufficiently great. On the other hand, I am limited to the amount presently allowable under The Small Claims Act, 1997. I therefore award the Plaintiff $4,500.00 under this head of damages. Although this amount, together with the award for other damages, is very close to the allowable limit, I am satisfied that this amount is warranted. The Defendant is a large national credit reporting agency that handles 90 million pieces of trade data per month. Any lesser amount would not have the desired effect on their conduct.
CONCLUSION
[38] The Plaintiff is awarded damages as follows:
1. $448.00 for loss of billable hours;
2. $4,500.00 as punitive or exemplary damages;
3. $50.00 as costs of issuing the summons.
________________________
D. J. O¡¯Hanlon, PCJ
