A certified class-action lawsuit that alleges that the Canadian Imperial Bank of Commerce (CIBC) had “vague” wording and “inappropriate” penalties in its mortgage contracts continues to wind its way through the courts, the lawyer working for the representative plaintiff told Business in Vancouver May 13.
CIBC (TSX:CM) is appealing the case, saying that it should not be certified as a class action. That appeal is expected to be heard by the end of 2015 or in early 2016, said Kieran Bridge, who is a principal at Kieran A.G. Bridge Law Corp.
Recent developments, since Business in Vancouver first covered the lawsuit in August 2014 , include B.C. Supreme Court Justice Jeanne Watchuk’s March 31 ruling that accepts Bridge’s definition of who is eligible to be included as part of the class and Bridge’s contention that punitive damages are appropriate.
“That does not mean that punitive damages will be awarded at this stage,” Bridge told BIV. “We’re still in the early days of this. Her ruling was that punitive damages are appropriate for a class action.”
At least 52,200 British Columbians will be entitled to refund cheques from CIBC if Bridge’s class-action lawsuit succeeds, he said.
The representative plaintiff in the case is Victoria resident Erin Sherry, who wanted out of a CIBC mortgage when her marriage dissolved.
The bank hit her with $47,869 in fees because she was only two years into a 10-year mortgage and interest rates had fallen between the time Sherry had committed to the mortgage and when she wanted to break it.
Her argument to get out of paying those fees is twofold, Bridge told BIV last year.
Sherry’s first argument is that the language in the mortgage document from CIBC's CIBC Mortgage Inc. subsidiary was so vague that it rendered the contract legally unenforceable.
Her other argument is that the mathematical formula that the bank used is improper, Bridge said.
“If an appropriate formula was used then the penalty would have been less.”
