Agassiz pawnshop charged criminal rate of interest on accordion loan, court rules
Credit to Author: David Carrigg| Date: Fri, 13 Sep 2019 05:29:23 +0000
An Agassiz pawnshop has been ordered to pay thousands of dollars to a man whom it loaned $500 at an interest rate of 300 per cent per annum.
In a recent Provincial Court of B.C. ruling, Judge Kristen Munstock ruled Adrian and Tracy Davies — doing business as Pioneer Trading Post — charged Garry Lawrence Hemminger a criminal rate of interest when they asked for 25 per cent a month for three months on a $500 loan secured by Hemminger’s accordion. The Criminal Code of Canada states a criminal rate of interest is anything over 60 per cent a year.
The case dates back to May, 2017, when Hemminger walked into the business at 6994 Pioneer Road with his accordion and in need of money to cover moving costs. He was advanced the loan, plus a $1.50 service fee, and then signed an invoice stating he would pay 25 per cent a month, maturing on August 11, 2017. The deal was that if the full balance of $845 was not paid by that date then the accordion would belong to the pawnshop.
By Aug. 11, Hemminger had made no payments. He walked in again on Aug. 12 and asked for a loan extension, but that was refused. At that point Tracy Davies told him the accordion had been sold, which it hadn’t. Davies told court that the accordion was sold in September or October of 2017 after being advertised for $3,900.
In court, Hemminger claimed the business owners had taken advantage of him and colluded with his ex-partner to make money out of him and that the interest rate that had been charged was criminal. Hemminger wanted the accordion back, or $6,000 in damages, plus $1,000 as damages for breach of promise, duress, collusion and unethical business practices.
Judge Munstock ruled the defendants did not coerce Hemminger or breach a promise, nor was there proof that the Davies had worked with the ex-partner to profit from the sale.
“The claimant and defendants did not enter into this pawn agreement for an illegal purpose or with an evil intention,” Munstock wrote. “This was not a classic loan-sharking transaction. In fact, the defendants mistakenly believed that because the agreement was only in effect for three months, the interest rate was acceptable.”
However, Munstock found the interest rate charged was criminal and “objectionable.”
According to the ruling, Davies did not tell the court who bought the accordion or for how much, so Munstock determined it was worth the advertised price of $3,900.
She ruled that Hemminger should receive $3,400 in damages — $3,900 less the loan amount of $500.