June 21, 1950

PC

Agar Rodney Adamson

Progressive Conservative

Mr. Adamson:

Just a matter of convenience for the minister?

Topic:   LOAN COMPANIES ACT
Subtopic:   AMENDMENTS WITH RESPECT TO ORGANIZATION, OFFICERS, ETC.
Permalink
LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

That is right.

Topic:   LOAN COMPANIES ACT
Subtopic:   AMENDMENTS WITH RESPECT TO ORGANIZATION, OFFICERS, ETC.
Permalink
PC

Agar Rodney Adamson

Progressive Conservative

Mr. Adamson:

The former minister of finance was a member of that committee.

Topic:   LOAN COMPANIES ACT
Subtopic:   AMENDMENTS WITH RESPECT TO ORGANIZATION, OFFICERS, ETC.
Permalink

Section agreed to. On section 2-President, vice-president, chairman of board.


CCF

Robert Ross (Roy) Knight

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knight:

I should like to make a general remark or two with respect to some of the methods employed by those who lend money in small amounts.

Topic:   LOAN COMPANIES ACT
Subtopic:   AMENDMENTS WITH RESPECT TO ORGANIZATION, OFFICERS, ETC.
Permalink
LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

Before my friend goes on, may I raise a point of order? This bill does not relate to what are commonly known as small loan companies. It affects only five companies, incorporated under this dominion act, which are under the supervision of the superintendent of insurance. The companies to which this bill relates are not engaged in the small loan business. Their distinguishing characteristic is that they are empowered to , lend on mortgages.

Topic:   LOAN COMPANIES ACT
Subtopic:   AMENDMENTS WITH RESPECT TO ORGANIZATION, OFFICERS, ETC.
Permalink
CCF

Robert Ross (Roy) Knight

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knight:

It happens that the remarks I wish to make apply to companies which are lending money on mortgages. With the permission of the committee I shall proceed for five minutes to develop this subject.

The first point I would make has to do with the misleading advertising put out by those who are lending money. The average man in the street, particularly one who is in urgent need of $100 and cannot get it anywhere except from these people who make small loans, is not usually conversant with rates of interest in tables which would be perfectly clear to a chartered accountant. When these companies say in their advertising that they are prepared to lend, let us say, $100 to a person under certain conditions, they draw up a schedule in which they say that they will lend the sum of $100 and that for this service the borrower will have to pay only the small amount of, let us say, $9 each month for 12 months. That is, if the loan was made on January 1 there would be a payment of $9 at the end of that month; then at the end of February another $9 would be payable. The innocent victim of this type of propaganda, who, I should imagine, thought he was paying eight per cent per annum, actually paid-although I have not figured it out-between twelve and fifteen per cent per annum.

My plea is that legislation should be passed to prevent people from misleading the public in that way. In other words, to put it briefly, when these people advertise that they have money to lend on that basis, they should be made to state clearly in their advertising the amount of interest per cent per annum- note, not just the rate of payment per month, but the interest in terms of percentage per annum.

The second matter to which I should like to refer has reference to money lent on a mortgage, and what I shall say arises from a grievance stated by one of my own constituents. I have looked into the matter and I have found that this grievance represents a fairly general practice. I shall not mention any names, although I am tempted to do so- and I shall do so if the practice continues in my own home town of Saskatoon, from which this complaint came.

This has reference to the borrowing of money for the purchase of a house. In this instance the house was purchased from a perfectly respectable firm, the Toronto General Trust Corporation-and I have nothing to say against them. This lady's lease was expiring, and in a month or so she would have been put out in the street. She went to one of these combined real estate and lending agencies. She had in her possession $2,000 to put down as a cash payment on the purchase of a house, and applied to these agencies for $3,500, the balance of the purchase price, making the total purchase price $5,500. Her job was to get the $3,500 somehow. She could of course obtain it by offering to give a first mortgage to a company that would advance the money.

With that in mind she made a tour of the various agencies in the city. The agency with which she finally did business consented to put up the money and-note this- demanded a bonus of $500 for so doing. So the situation came about that this lady signed a mortgage in favour of that agency for $4,000, on which she pays what I am told is the customary rate of six per cent interest for such a transaction.

She has in her possession a statement signed by a responsible officer of the agency dated March 25, 1948, in the following words:

Purchase price at $5,500, plus bonus of $500; total

She informed me that another agency asked her for a bonus of $700 for similar accommodation. In my view that is a public scandal. Here was a woman who borrowed $3,500 for a perfectly legitimate purpose. I shall be told of course that whether she should sign the mortgage or not was a matter

within her own discretion. But her circumstances, the fact that her lease was expiring, and the further fact that she made her living by keeping boarders, simply meant that she had to sign that mortgage for $4,000 in order to obtain the $3,500. It might be added that her husband is an invalid. The result is that today that woman is paying interest on $4,000 at six per cent. She obtained from the company $3,500, but in addition to paying six per cent on that amount, she is paying six per cent on an additional $500 she never received.

She holds a letter dated April 7 from this same agency in Saskatoon. This appears to be the final word in the matter of closing the transaction-as I shall now close my remarks. This letter states:

The property Is now standing in your name, subject to a mortgage of $4,000 repayable monthly including principal, interest and taxes.

Topic:   LOAN COMPANIES ACT
Subtopic:   AMENDMENTS WITH RESPECT TO ORGANIZATION, OFFICERS, ETC.
Permalink
SC

Robert Fair

Social Credit

Mr. Fair:

What company pulled a steal like that?

Topic:   LOAN COMPANIES ACT
Subtopic:   AMENDMENTS WITH RESPECT TO ORGANIZATION, OFFICERS, ETC.
Permalink
CCF

Robert Ross (Roy) Knight

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knight:

I say people like this should be exposed, and legislation should be passed by the House of Commons to protect innocent victims from such robbery.

Topic:   LOAN COMPANIES ACT
Subtopic:   AMENDMENTS WITH RESPECT TO ORGANIZATION, OFFICERS, ETC.
Permalink
?

An hon. Member:

What is the name of the company?

Topic:   LOAN COMPANIES ACT
Subtopic:   AMENDMENTS WITH RESPECT TO ORGANIZATION, OFFICERS, ETC.
Permalink
CCF

Robert Ross (Roy) Knight

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knight:

I shall give it. This whole transaction has to do with Saskatoon Agencies Limited. It is registered under that name as a company engaged in handling real estate and lending money to victims such as the one I have mentioned. I have mentioned the name of this company because it was concerned with this particular transaction, but there are others.

Topic:   LOAN COMPANIES ACT
Subtopic:   AMENDMENTS WITH RESPECT TO ORGANIZATION, OFFICERS, ETC.
Permalink
PC

Arthur Leroy Smith

Progressive Conservative

Mr. Smith (Calgary West):

Mr. Chairman, both the points raised by the hon. member for Saskatoon have nothing to do with the companies concerned in this present piece of legislation. No one will decry more than I an instance such as the one last described; but let us always remember that when a person seeks a loan on real estate the amount borrowed must be kept in mind. Many years ago I had a good deal to do with the lending of money on mortgages. I spent my first year as a law student writing out mortgages by hand-they did not allow us to type them in those days. It was felt then that fifty per cent was a safe lendable value. The view was that to that extent, a loan could be made with reasonable safety but that anything over that amount-and in the instance referred to by the hon. member it was a great deal more-involved taking a much greater risk and must bring a greater return. I will go so far as to say that charge might have been considered outrageous.

Loan Companies Act

It is very easy to rail against lending companies and insurance companies. But having had a long experience with many of them I know there are other sides to the picture. In that area of western Canada from which my hon. friend comes, insurance companies in the lending business-and I am referring to the larger and legitimate ones-did suffer tremendous losses in connection with real estate loans. Fortunately conditions improved, and if they maintained the properties they probably got their money back.

My real point is to say a word-and it is not popular from a vote-catching standpoint to say a good word for a lending company- on behalf of these companies. What I say is said in the light of my own experience. I want to commend the treatment that has been accorded to individuals by some of these loan companies. I agree that in the case of some of these little touches the interest rates charged are almost phenomenal, but that does not apply to the larger respectable loan companies in the dominion.

Topic:   LOAN COMPANIES ACT
Subtopic:   AMENDMENTS WITH RESPECT TO ORGANIZATION, OFFICERS, ETC.
Permalink

Section agreed to. Sections 3 to 11 inclusive agreed to. Bill reported, read the third time and passed.


STATUTE LAW AMENDMENT

PROVISION THAT CORPORATE CROWN AGENCIES MAY SUE AND BE SUED WITHOUT FIAT


The house resumed from Friday, June 16, consideration in committee of Bill No. 313, to amend the statute law-Mr. Garson-Mr. Dion in the chair. On section 1-Agent of His Majesty.


PC

Arthur Leroy Smith

Progressive Conservative

Mr. Smith (Calgary West):

Mr. Chairman, I have not read this bill, which is perhaps my fault, but I take it that it is the bill that was introduced some time ago by the Minister of Justice to provide that government corporations may sue or be sued in the ordinary courts of the country. I want again to make the plea that I have made for the last six years, that we should be able to sue the government in the same way as we are being allowed under this bill to sue a corporation which it controls. I have never heard from the Minister of Justice, or the last two ministers of justice, any real reason why the subject should not be able to sue this government-or any government; because I am not speaking from the political point of view-without the necessity of obtaining a fiat so to do.

I cannot think it means liberty, I cannot see that it is democratic, that anything of that kind should be necessary. On the last occasion the Minister of Justice told us that there was

Statute Law Amendment no necessity for this because the government had not refused a fiat. He was giving information which he had obtained from his deputy, something that he had heard, but I know that flats have been refused or have been stalled-I use the word in the most respectful sense-so that in the course of getting a fiat a person may become tired and simply let the matter drop.

I can see no legitimate reason why a subject who has been wronged by any government, provincial or otherwise, should have to get a fiat in order to seek redress. This does not apply in connection with our municipal governments. If a city truck runs over me and injures me I can issue a writ, but in most municipalities I would be required to give notice of intention to sue. I am all in favour of that, because the government has agencies in almost every municipality across Canada and I think notice should be given, as is necessary in the case of most municipalities, so that the government could get in touch with its people and have an opportunity of discussing the matter and probably reaching a settlement.

For the subject to have to ask permission to sue is out of date. Of course the thing is based on the old adage that the king can do no wrong. That is the only reason for this silly business of obtaining a flat. If the king can do no wrong, it is obvious that there is no action.

I am not going to move any amendment. As I say, I have raised this question on previous occasions and I am delighted that the minister has gone as far as he has in the direction of granting complete justice to* the subject-or the individual; the latter word is perhaps better, because he does not need to be a subject in order to sue in this country.

Why we are making two bites of the cherry is just beyond me. We should go the whole way, as I think all hon. members believe we should do, and permit the citizen to sue the crown, with the safeguard I have mentioned of giving thirty days' or even sixty days' notice, so that the government, either federal or provincial, may have plenty of time to investigate the matter and probably reach a settlement and thus avoid long and expensive litigation.

I have nothing more to say. I am simply following the course I have taken since I first came here. I can think of no reason why we should continue this antediluvian and outdated idea of insisting on a fiat before the crown can be sued.

Topic:   STATUTE LAW AMENDMENT
Subtopic:   PROVISION THAT CORPORATE CROWN AGENCIES MAY SUE AND BE SUED WITHOUT FIAT
Permalink
LIB

Stuart Sinclair Garson (Minister of Justice and Attorney General of Canada)

Liberal

Mr. Garson:

Mr. Chairman, in spite of the fact that I thought the remarks of my hon. friend were out of order on this bill, because

of the generous treatment which was accorded the bill the other day I did not feel that I should be so discourteous or ungenerous as to raise a point of order against him. The bill is concerned with the very thing which the hon. member advocates, the abolition of the necessity of a flat in so far as crown companies are concerned.

With regard to the use of fiats in actions by individuals against His Majesty, when the estimates of the Department of Justice are before the committee I shall be glad to go into that matter at whatever length my hon. friend wishes. But with your permission, Mr. Chairman. I should like to say just a word or two by way of reply to my hon. friend in connection with this matter of securing fiats.

To listen to my hon. friend, or to read certain criticisms of the fiat system, one would think that the necessity of getting a fiat placed some great and expensive impediment in the way of people seeking justice against the crown. I am sure that the hon. member for Calgary West knows that the Petition of Right Act is a short and simple statute consisting of fourteen sections. I do not know of a judicature act in any other country that is as short and simple. It provides that where John Doe, we will say, thinks he has some kind of claim against His Majesty, he goes to his solicitor, and the solicitor draws up form A, which is set out in the Petition of Right Act. I should like to refer to form A to show how complicated and difficult-of course I am speaking ironically-it is to file; because I defy my hon. friend or any other member of the house to find a simpler form in any statute of any other country in the world.

Topic:   STATUTE LAW AMENDMENT
Subtopic:   PROVISION THAT CORPORATE CROWN AGENCIES MAY SUE AND BE SUED WITHOUT FIAT
Permalink
PC

Arthur Leroy Smith

Progressive Conservative

Mr. Smith (Calgary West):

I agree with all that.

Topic:   STATUTE LAW AMENDMENT
Subtopic:   PROVISION THAT CORPORATE CROWN AGENCIES MAY SUE AND BE SUED WITHOUT FIAT
Permalink
LIB

Stuart Sinclair Garson (Minister of Justice and Attorney General of Canada)

Liberal

Mr. Garson:

The form is as follows: Petition of Right.

In the Exchequer Court of Canada.

To the King's Most Excellent Majesty:

County (or district) of (place proposed for trial) to wit:

The humble petition of-

We will say John Doe.

-showeth that (state with convenient certainty the facts on which petitioner relies as entitling him to relief).

Could anything in the English language be simpler than that? After the conclusion of the statement of facts the form continues: Conclusion

Your suppliant therefore humbly prays that (state the relief claimed).

That is the great impediment.

Topic:   STATUTE LAW AMENDMENT
Subtopic:   PROVISION THAT CORPORATE CROWN AGENCIES MAY SUE AND BE SUED WITHOUT FIAT
Permalink

June 21, 1950