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Financial Institutionals - Banks - Accounts. Bishay v. Bank of Montreal
In Bishay v. Bank of Montreal (Ont CA, 2025) the Ontario Court of Appeal dismissed a rare Bank Act appeal, here brought against the dismissal of "an application under the Bank Act, S.C. 1991, c. 46 before the Superior Court of Justice requesting that it compel the respondent, Bank of Montreal (“BMO”) to reinstate a chequing account":[2] The appellant, Samer Bishay, brought an application under the Bank Act, S.C. 1991, c. 46 before the Superior Court of Justice requesting that it compel the respondent, Bank of Montreal (“BMO”) to reinstate a chequing account that he had opened with BMO on June 28, 2022.
[3] BMO had provided notice to the appellant on May 28, 2024 that it was terminating its banking relationship with him because of “information indicating [his] past business or personal activity” did not align with BMO’s “risk tolerance”. By the time of the hearing, all the appellant’s accounts with BMO had been closed. One of these accounts was the appellant’s chequing account, also referred to as a retail deposit account.
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[5] The appellant did not dispute that banks are entitled to terminate a banking relationship upon providing reasonable notice and without justification under the common law. Rather, the appellant relied on s. 627.17(1) of the Bank Act and argued that BMO was required “to open, and by implication to maintain,” his account.
[6] Section 627.17 provides, in relevant part:Retail Deposit Accounts
Opening
627.17 (1) Subject to subsection (2), a member bank shall, at any point of service or any branch in Canada at which it opens retail deposit accounts through natural persons, open a retail deposit account on the request, made there in person, of a natural person who
(a) presents to the member bank
(i) two documents from a reliable source — one of which indicates the person’s name and address and the other the person’s name and date of birth.… [Emphasis added.] [7] The application judge defined the issue before her as one of statutory interpretation. As she put it: does the word “open” used in s. 627.17 refer only to the initial opening of the account, or does it mean that the account is to remain open?
[8] The application judge then went on to consider the word “open” by reading the word in its entire context and in its grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act and the intention of the Legislature: see Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC), [1998] 1 S.C.R. 27.
[9] After conducting this statutory interpretation exercise, the application judge concluded that BMO’s actions in closing the appellant’s account did not violate s. 627.17 because that section pertained to the opening of bank accounts not the closing of bank accounts. The application judge agreed with BMO's submission that the closure of accounts was governed by the terms of the agreement between the bank and the customer as well as common law principles.
[10] The appellant appeals and renews the same arguments he made before the application judge. The crux of the appellant’s submission is that s. 672.17 is consumer protection legislation and that the definition of the word “open” is flexible enough to require a bank, once they open an account for a customer, to keep it open unless one of the exceptions set out in s. 627.18(1) applies. Those exceptions include illegal or fraudulent activity or purposes, material misrepresentations, the protection of employees and customers from physical harm or other abuse, lack of availability of the applicable account at the bank’s point of service and any prescribed circumstances.
[11] We see no merit to the appellant’s arguments.
[12] The appellant has not pointed to any reviewable error in the application judge’s reasons. The application judge fully understood the argument made by the appellant regarding the legislative intent behind s. 672.17. She rejected the appellant’s submission and held that there is no reference to “maintain” in s. 627.17 and that the definition of the verb “open” means to start something and not to continue something indefinitely.
[13] We agree with and adopt the application judge’s reasoning.
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