NOTICE OF CIVIL CLAIM. This action has been started by the plaintiffs for the relief set out in Part 2 below.

Transcription

1 IN THE SUPREME COURT 0 F BRITISH COLUMBIA No. Vancouver Registry BETWEEN: CHERYL LYNN ROBINSON and CYNTHIA ELIZABETH KASK PLAINTIFFS AND: NATIONAL MONEY MART COMPANY, JUSTENNA ENTERPRISES INC., DAVID ROBERTSON, INTERIOR MONEY MARTS LTD., B.C. LTD., EDWARD THERRIEN, ROD CHARLTON, B.C. LIMITED, BRENT THERRIEN, and B.C. LTD. Brought under the Class Proceedings Act, R.S.B.C. 1996, c.50 NOTICE OF CIVIL CLAIM DEFENDANTS This action has been started by the plaintiffs for the relief set out in Part 2 below. If you intend to respond to this action, you or your lawyer must (a) file a response to civil claim in Form 2 in the above-named registry of this court within the time for response to civil claim described below, and (b) serve a copy of the filed response to civil claim on the Plaintiff. If you intend to make a counterclaim, you or your lawyer must (a) file a response to civil claim in Form 2 and a counterclaim in Form 3 in the above-named registry of this court within the time for response to civil claim described below, and (b) serve a copy of the filed response to civil claim and counterclaim on the Plaintiffs and on any new parties named in the counterclaim. JUDGMENT MAYBE PRONOUNCED AGAINST YOU IF YOU FAIL to file the response to civil claim within the time for response to civil claim described below. Time for response to civil claim A response to civil claim must be filed and served on the Plaintiff, K:\3649\3649p\PLEAOOOI - NofCC.docx

2 -2- (a) (b) (c) (d) if you reside anywhere in Canada, within 21 days after the date on which a copy of the filed notice of civil claim was served on you, if you reside in the United States of America, within 35 days after the date on which a copy of the filed notice of civil claim was served on you, if you reside elsewhere, within 49 days after the date on which a copy of the filed notice of civil claim was served on you, or if the time for response to civil claim has been set by order of the court, within that time. CLAIM OF THE PLAINTIFFS Part 1: STATEMENT OF FACTS The Parties I. The representative Plaintiff, Cheryl Lynn Robinson, is a resident of Surrey, British Columbia. 2. The representative Plaintiff, Cynthia Elizabeth Kask, is a resident of Kamloops, British Columbia. 3. The Defendant, National Money Mart Company ("Money Mart Co.") is a company incorporated under the laws of Nova Scotia and is registered as an extraprovincial company under the laws of British Columbia. Money Mart Co. has a head office within British Columbia at 401 Garbally Road, Victoria, British Columbia. 4. The Defendant, Justenna Enterprises Inc. ("Justenna"), is a company incorporated under the laws of Canada and is registered as an extra-provincial company under the laws of British Columbia. Justenna has a registered address for delivery in British Columbia at Suite Cook Road, Richmond, British Columbia. 5. The Defendant, David Robertson is a shareholder and the sole officer and director of Justenna, and has an office at 60 Harlowe Road, Suite II, Hamilton, Ontario. 6. The Defendant, Interior Money Marts Ltd. ("Interior Money Marts"), is a company incorporated under the laws of British Columbia, with a registered and records office at Harvey Avenue, Kelowna, British Columbia. K:\3649\3649p\PLEAOOOI - NofCC.docx

3 The Defendant, B.C. Ltd. ("579830"), is a company incorporated under the law of British Columbia with a registered and records office at Dolphin Avenue, Kelowna, British Columbia. 8. The Defendant, Edward Therrien, is or was a shareholder of Interior Money Marts and and was until November 2006, the sole director and President of Interior Money Marts and a director and the President of Edward Therrien has or had an office at Harvey Avenue, Kelowna, British Columbia. 9. The Defendant, Rod Charlton is or was a shareholder of and was until March 2006, an officer and director of and an officer of Interior Money Marts and also has or had an office at Harvey Avenue, Kelowna, British Columbia. 10. The Defendant, B.C. Limited ("324917"), is a company incorporated under the laws of British Columbia, and has a registered and records office at Harvey Avenue, Kelowna, British Columbia. 11. The Defendant, Brent Therrien, is a shareholder and the sole officer and director of B.C. Limited and has an office at Harvey Avenue, Kelowna, British Columbia. 12. The Defendant, B.C. Ltd. ("360788) was a company incorporated under the law of British Columbia and was voluntarily dissolved on January 31, The records office of is St. Paul Street, Kamloops, British Columbia. 13. Money Mart Co. is in the business of lending short-term loans, known as "Fast Cash Advances" or "Payday Loans" (collectively "payday loans"), under the name "Money Mart". 14. The Money Mart payday loan business is carried on through the stores owned and operated by Money Mart Co. and also through stores owned and operated by the franchisees of Money Mart Co. K:\3649\3649p\PLEAOOOI. NofCC.docx

4 Justenna is a franchisee of Money Mart Co. It owns and operates four Money Mart stores in British Columbia, in Surrey, Squamish, Whistler and Penticton. Justenna carries on the business of providing payday loans at these locations under the name Money Mart , Interior Money Marts and B.C. Ltd. were franchisees of Money Mart until March 8, Until that date, owned and operated Money Mart stores in British Columbia located in Kelowna and Rutland, Interior Money Marts owned and operated Money Mart stores in British Columbia located in Kamloops, and owned and operated Money Mart Stores in British Columbia located in Vernon. Until March 8, 2006, , Interior Money Marts and carried on the business of providing payday loans at these locations under the name Money Mart was a franchisee of Money Mart until November 1,2006. Until that date, owned and operated Money Mart stores in British Columbia located in Prince George and carried on the business of providing payday loans at these locations under the name Money Mart. 18. The representative Plaintiffs bring this action on their own behalf and on behalf of all persons who borrowed a payday loan from a Money Mart store in British Columbia operated by Justenna, , Interior Money Marts, or (collectively the "B.C. Franchisees"), prior to November I, 2009 and repaid the payday loan by the B.C. Franchisee cashing the first party post-dated cheque provided by the borrower in order to obtain the payday loan. The Payday Loans Advanced by the B.C. Franchisees 19. Money Mart Co. has entered into franchise agreements with each of the B.C. Franchisees which required the B.C. Franchisees to operate their Money Mart stores and advance payday loans in accordance with standard operating procedures and terms set by Money Mart Co. K:\3649\3649p\PLEAOOOI. NofCC.docx

5 At all material times, the B.C. Franchisees advanced payday loans In accordance with the standard operating procedures and terms set by Money Mart Co. 21. In accordance with the standard operating procedures set by Money Mart Co., both the term and the maximum amount of the payday loans provided by the B.C. Franchisees are set in relation to the borrowers next scheduled "payday", meaning the next date on which the borrower will receive the next payment from the borrower's source of income, either from employment or some other form of regular payment, such as a pension, unemployment insurance, or disability benefits. 22. At all material times prior to November 1, 2009, the standard operating procedure set by Money Mart Co., and employed by the B.C. Franchisees in advancing payday loans, provided that: (a) (b) (c) (d) each borrower must execute the "Money Mart" standard form loan agreement, in the form then used by Money Mart Co., the terms of which are not negotiable by the borrower; the maximum term of a payday loan could be up to 31 days but could not exceed the borrower's next scheduled payday; the "due date" of the payday loan recorded in the standard form loan agreement must be set as the date before the borrower's next scheduled payday; and the maximum amount of a payday loan could not exceed 30% of the amount the borrower would receive on the borrower's next scheduled payday, up to July 1, 2004 and subsequent to that date, could not exceed 40% of that amount. 23. At all material times prior to November 1, 2009, the standard operating procedures set by Money Mart Co., and employed by the B.C. Franchisees in advancing payday loans, required the borrower, upon execution of the Money Mart standard form K:\3649\3649p\PLEAOOO I. NofCC.docx

6 - 6 - loan agreement and in order to obtain the payday loan, to provide the B.C. Franchisees with a first party cheque, meaning a cheque payable to the borrower and endorsed by the borrower, post -dated to the date of the borrower's next scheduled payday and In an amount equal to: (a) (b) (c) the principal amount of the payday loan; interest on the payday loan calculated in accordance with the terms of the standard form loan agreement then set by Money Mart Co.; and a standard "First Party Cheque Cashing Fee" calculated in accordance with the terms of the standard form payday loan agreement then set by Money Mart Co. 24. Each of the standard form loan agreements set by Money Mart Co., and used by the B.C. Franchisee in advancing payday loans prior to November I, 2009, calculated an amount stated to be interest on the payday loan, to be included in the amount of the post-dated first party cheque the borrower must provide in order to obtain the payday loan, which amount is calculated at an effective annual rate of interest of at least 58%. 25. Each of the standard form loan agreements set by Money Mart Co. and used by the B.C. Franchisees in advancing payday loans prior to November 1,2009, sets out a formula for calculating the amount of standard First Party Cheque Cashing Fee set by Money Mart Co., to be included in the amount of the post-dated first party cheque the borrower must provide in order to obtain the payday loan, which formula sets the First Party Cheque Cashing Fee as the sum of: (a) an amount equal to a percentage of the principal amount of the payday loan, which percentage has ranged from 2.90% to 7.99% in the standard form loan agreements set by Money Mart Co. and used by the B.C. Franchisees from time to time; K:\3649\3649p\PLEAOOOI - NofCC.docx

7 - 7 - (b) a set dollar amount, which amount has ranged from $9.99 to $14.99 in the standard form Fast Cash Advance loan agreements set by Money Mart Co. and used by the B.C. Franchisees from time to time. 26. Each of the standard form loan agreements set by Money Mart Co., and used by the B.C. Franchisees in advancing payday loans prior to November I, 2009, provides that the borrower must repay the principal amount of the payday loan, with interest as calculated on the standard form loan agreement, in cash on the "due date" set by the standard form loan agreement. Under the standard operating loan procedures set by Money Mart Co. and used by the B.C. Franchisees, the "due date" of the payday loan is set as the day before the borrower's next scheduled payday. Each of the standard form loan agreements provides further that if the borrower does not repay this amount in cash before the borrower's next payday, the loan will be repaid by the B.C. Franchisees cashing on the borrower's payday the post-dated first party cheque provided by the borrower in order to obtain the payday loan. 27. The substance of the terms on which the B.C. Franchisees have advanced payday loans prior to November 1,2009, as set out in paras through 1.26 above, and the true character and effect in law of those terms, is that the payday loans provided by the B.C. Franchisees are loans until the borrower's next payday, with a right provided to the borrower to prepay that loan in cash before the borrower's next payday and thereby avoid payment of the standard First Party Cheque Cashing Fee, which the borrower is otherwise required to pay in order to obtain the benefit of the payday loan until the borrower's next payday. 28. The B.C. Franchisees have advanced payday loans to the Class members prior to November I, 2009 in the manner and on the terms set out in paras through 1.26 above, and have collected repayment of payday loans borrowed by Class members prior to November 1, 2009 by cashing the post-dated first party cheque the Class member was required to provide in order to obtain the payday loan. As a result, each Franchisee K:\3649\3649p\PLEAOOOI. NofCc.docx

8 - 8 - has collected from one or more Class members in respect of one or more payday loans borrowed prior to November 1, 2009: (a) (b) (c) the principal amount of the payday loan immediately upon expiry of the loan term, which in every case was within 31 days of the loan advance; interest calculated on the principal amount of the payday loan calculated at an effective annual rate of at least 58% for the loan term; and an additional sum in the amount of the standard First Party Cheque Cashing Fee set by Money Mart Co., which in every case exceeds 2.90% of the principal amount of the loan advanced. 29. For each payday loan borrowed by the Class members from the B.C. Franchisees prior to November 1, 2009 and repaid by the B.C. Franchisee cashing the post-dated first party cheque the Class member provided to obtain the payday loan, the B.C. Franchisees have paid to Money Mart Co. a portion of the standard First Party Cheque Cashing Fees collected from the Class members, as royalty or commission due to Money Mart Co. under the terms of its franchise agreements with the B.C. Franchisees. 30. In exchange for the receipt of royalties or commissions from the B.C. Franchisees, Money Mart Co. provided the B.C. Franchisees administrative and technical support in the operation of their payday loan business and engaged in marketing and advertising to promote the Money Mart trade name and business, for the mutual benefit of Money Mart Co. and the B.C. Franchisees. The Plaintiffs' Payday Loans 31. For more than ten years, the Plaintiff Robinson has repeatedly borrowed payday loans from the Money Mart store located at nd Street in Surrey, British Columbia. This store was at all material times a Money Mart franchise operated by the corporate entity now known as Justenna. K:\3649\3649p\PLEAOOOI - NofCG.docx

9 The amount of the Plaintiff Robinson's payday loans borrowed prior to November I, 2009 have ranged from $100 to $800 and were for terms usually of around approximately two weeks. Precise particulars of the Plaintiff Robinson's payday loans are well known to Money Mart Co. and Justenna. 33. For a period of two years from approximately 2002 to 2003, the Plaintiff Kask repeatedly borrowed payday loans from the Money Mart stores located in Kamloops at 205 Tranquille Road. These stores were, at all material times until March 8, 2006, Money Mart franchise stores operated by Interior Money Marts. 34. The amount of the Plaintiff Kask's payday loans ranged from $500 to $1,000 and were for terms usually of around approximately two weeks. Precise particulars of the Plaintiff's Kask's payday loans are well known to Money Mart Co. and Interior Money Marts. 35. The Plaintiffs have repaid most or all of their payday loans borrowed prior to November I, 2009 by Justenna or Interior Money Marts cashing the first party cheque that the Plaintiffs were required to provide in order to obtain the payday loan, as set out in para above. 36. As a result of the repayment by the Plaintiffs of their payday loans borrowed prior to November 1, 2009 by Justenna or Interior Money Marts cashing the post-dated first party cheque provided by the Plaintiffs in order to obtain their payday loans, Justenna has received in respect of such payday loan repaid by the Plaintiff Robinson and Interior Money Marts has received in respect of each such payday loan repaid by the Plaintiff Kask: (a) (b) repayment of the principal amount of each payday loan immediately upon expiry of the loan term, and in every case, within 31 days of the loan advance; interest calculated on the principal amount of the Fast Cash Advance loan at an effective annual rate in excess of 58% for the loan term; and K:\3649\3649p\PLEAOOOI - NofCC.docx

10 - 10- (c) an additional sum in the amount of Money Mart's standard First Party Cheque Cashing Fee set by Money Mart Co., which in every case was in excess of2.9% of the principal amount advanced 37. For each payday loan borrowed prior to November 1, 2009 which the Plaintiffs have repaid by Justenna or Interior Money Marts cashing the post-dated first party cheque the Plaintiffs provided in order to obtain the payday loan, Money Mart Co. has received a portion of the standard First Party Cheque Cashing Fee paid by the Plaintiffs. The Officers and Directors of the B.C. Franchisees 38. David Robertson caused Justenna to be formed for the purpose, in part, of carrying on the business of providing payday loans as a Money Mart franchisee, in the manner set out in paras through 1.26 above, or caused Justenna after it was formed to enter into the payday loan business to carry on that business in that manner, for the benefit of Robertson. 39. David Robertson at all times exercised effective and actual control over Justenna and directed its management. 40. David Robertson directed Justenna to advance payday loans to the Class members as set out in para through 1.26 above, for his benefit. 41. David Robertson has received from Justenna part of the First Party Cheque Cashing Fees collected from the Plaintiff Robinson, and other Class members who borrowed from Justenna, through the payment to David Robertson of salary, management fees, bonuses or dividends. 42. Edward Therrien and Rod Charlton, or one of them, caused Interior Money Marts and to be formed, for the purpose, in part, of carrying on the business of providing payday loans as a Money Mart franchisee, in the manner set out in paras through 1.26 above, or caused Interior Money Marts and after they K:\3649\3649p\PLEAOOOI NofCC.docx

11 were formed to enter into the payday loan business to carry on that business in that manner, for the benefit of Edward Therrien and Rod Charlton. 43. Edward Therrien and Rod Charlton at all times exercised effective and actual control over Interior Money Marts and and directed the management of those companies 44. Edward Therrien and Rod Charlton directed Interior Money Marts and to advance payday loans to the Class members as set out in paras through 1.26 above for the benefit of Edward Therrien and Rod Charlton. 45. Edward Therrien and Rod Charlton have received from Interior Money Marts part of the First Party Cheque Cashing Fees collected from Class members who borrowed from Interior Money Marts and , through the payment to them of salary, management fees, bonuses or dividends. 46. Brent Therrien caused to be formed, for the purpose, in part, of carrying on the business of providing payday loans as a Money Mart franchisee, in the manner set out in paras through 1.26 above, or caused after it was formed to enter into the payday loan business to carry on that business in that manner, for the benefit of Brent Therrien. 47. Brent Therrien at all times exercised effective and actual control over and directed its management. 48. Brent Therrien directed to advance payday loans to the Class members as set out in paras through 1.26 above, for his benefit. 49. Brent Therrien has received from part of the First Party Cheque Cashing Fees collected from Class members who borrowed from , through the payment to Brent Therrien of salary, management fees, bonuses or dividends. K:\3649\3649p\PLEAOOOl - NofCC.docx

12 Money Mart Class Action 50. On March 14, 2007, the B.C. Supreme Court certified as a class proceeding the action in MacKinnon v. National Money Mart Company, Vancouver Registry No. S030527, which action had been commenced on January 29, The Order certifying the action as a class proceeding provided that: "The class is comprised of all persons who have borrowed money from Money Mart as a Fast Cash Advance loan and have repaid that Fast Cash Advance loan using the Post Dated First Party Cheque provided to Money Mart in order to obtain the loan, between January 29, 1993 and the date the notice is given to the class pursuant to the Order of the Court." 51. On July 19,2010, the B.C. Supreme Court approved the settlement of the MacKinnon action. This settlement entitled persons who borrowed directly from Money Mart Co. to claim benefits under the settlement but did not entitle any persons to claim benefits in respect of loans borrowed from Money Mart franchisees, including the B.C. Franchisees. 52. Under the terms of the settlement in MacKinnon, all persons who borrowed directly from Money Mart Co. released all claims against Money Mart Co., including any claims they may have against Money Mart Co. in respect of a payday loan obtained from a Money Mart franchisee. These persons did not release any claims they had directly against a Money Mart franchisee, including the B.C. Franchisees. 53. Persons who borrowed from a Money Mart franchisee and did not borrow loans from Money Mart Co., like the Plaintiffs, were not part of the settlement in MacKinnon and did not release any claims they had against Money Mart Co. in respect of loans they borrowed from any of the B.C. Franchisees. K:\3649\3649p\PLEAOOOI. NofCG.docx:

13 Part 2: RELIEF SOUGHT I. A declaration pursuant to s. 172(1)(a) of the Business Practices Consumer Protection Act, R.S.B.c. 2004, c.2 (the "BPCPA") that the collection by the B.c. Franchisees of the First Party Cheque Cashing Fees, constitutes an unconscionable trade act or practice, contrary to s. 8(1) of the BPCPA. 2. An order pursuant to s.i72(3)(a) of the BPCPA that Money Mart Co. and the B.C. Franchisees restore to the Class members the money that Money Mart Co. and the B.C. Franchisees received from the collection of First Party Cheque Cashing Fees from the Class members in contravention of the BPCP A. 3. Damages in conspiracy from Money Mart Co. 4. A declaration that David Robertson, Edward Therrien, Rod Charlton and Brent Therrien are jointly and severally liable to the Class members for any liability of the B.C. Franchisees of which they were officers or directors, arising out of the collection by those B.c. Franchisees of the First Party Cheque Cashing Fees from Class members. 5. An order that Money Mart Co., David Robertson, Edward Therrien, Rod Charlton and Brent Therrien account and make restitution to the Class members of all of the benefit they have received as a result of the collection from the Class members of the First Party Cheque Cashing Fees by the B.C. Franchisees, and a declaration that Money Mart Co., David Robertson, Edward Therrien, Rod Charlton and Brent Therrien hold any such benefit they received in constructive trust for the Class members. Part 3: LEGAL BASIS Section 347(1) of the Criminal Code I. The standard First Party Cheque Cashing Fee charged and collected by the B.C. Franchisees from Class members for loans borrowed prior to November I, 2009, K:\3649\3649p\PLEAOOOI NofCC.docx

14 pursuant to the terms of the Money Mart standard form loan agreements by which each payday loan was advanced to the Class members, including the standard First Party Cheque Cashing Fee charged and collected in respect of the Plaintiffs' payday loans, constitute interest for the purpose of s. 347(1) of the Criminal Code. 2. The effective annual rate of interest paid by the Class members and earned by the B.C. Franchisees as a result of the collection by them of the standard First Party Cheque Cashing Fee from Class members upon repayment of their payday loans borrowed prior to November 1, 2009, by the B.C. Franchisees cashing the post-dated first party cheque provided by the Class members at the time of the advance of their payday loans, including the effective annual rate of interest paid by the Plaintiffs as a result of the collection of the First Party Cheque Cashing Fees in respect of the Plaintiffs' payday loans, in every case far exceeds 60% on the principal amount of each payday loan advanced, calculated in accordance with generally accepted actuarial practices and principles, and constitutes a criminal rate of interest as defined in s. 347(1) of the Criminal Code. 3. The terms of the standard form loan agreements set by Money Mart Co. and used by the B.C. Franchisees prior to November 1, 2009 to advance payday loans to the Class members, including the Plaintiffs, required them to pay the First Party Cheque Cashing Fee in order to obtain the benefit of the payday loan until their next payday, in an amount resulting in an effective rate of interest on the payday loan in excess of 60%, and therefore, in every case those agreements constitute agreements to receive interest at a criminal rate, contrary to s. 347(1) of the Criminal Code. 4. The collection by the B.C. Franchisees of standard First Party Cheque Cashing Fees from the Class members upon repayment of their payday loans borrowed prior to November 1, 2009, by the B.C. Franchisees cashing the post-dated first party cheque provided by the Class members at the time of the advance of their payday loans, including the collection of the standard First Party Cheque Cashing Fees in respect of the K:\3649\3649p\PLEAOOOI - NofCC.docx

15 Plaintiffs' payday loans borrowed prior to November I, 2009, constitute the receipt of interest at a criminal rate, contrary to s. 347(1) of the Criminal Code. 5. The collection by Money Mart Co. from B.C. Franchisees of part of each of First Party Cheque Cashing Fee collected from the Class members for loans borrowed prior to November 1,2009, including the collection by Money Mart Co. of part of each First Party Cheque Cashing Fees paid by the Plaintiffs in respect of their payday loans, constitutes the receipt by Money Mart Co. of interest, or a partial payment of interest, at a criminal rate, contrary to s. 347(1) of the Criminal Code. 6. The B.C. Franchisees have knowingly and deliberately entered into agreements for the advance of payday loans to Class members prior to November I, 2009 on terms which offend s. 347(1) of the Criminal Code, and received loan fees in relation to their payday loans which violate s. 347(1), for the purpose of receiving an unlawful rate of return on the payday loans advanced to Class members. 7. Money Mart Co. knowingly and deliberately required the B.C. Franchisees to advance payday loans prior to November 1,2009 on terms which offend s. 347(1) of the Criminal Code, and to receive loan fees for those loans which violate s. 347(1), for the purpose of Money Mart receiving part of the unlawful rate of return earned by the B.C. Franchisees on the payday loans advanced by them to Class members prior to November 1, In May 2007, the Criminal Code was amended to add s , which exempts a "payday loan", as defined by s from the scope of s. 347 of the Criminal Code if, and only if, the payday loan was made in compliance with provincial regulations which meet the requirements of s and are designated by the Governor-in-Council pursuant to that section. 9. Payday loan regulations authorizing payday loans in British Columbia pursuant to s of the Criminal Code came into effect in British Columbia on November 1,2009. K:\3649\3649p\PLEAOOOI - NofCC.docx

16 None of the payday loans advanced by the B.C. Franchisees to Class members prior to November I, 2009, including the payday loans advanced to the Plaintiffs, were authorized pursuant to s of the Criminal Code and the operating procedures employed by the B.C. Franchisees, as required by Money Mart Co., of setting the due date of the payday loan as the day before the borrower's payday and requiring the borrower to provide a post-dated first party cheque, are expressly prohibited by the new payday loan regulations. Unconscionable Trade Practices II. The Plaintiffs and all Class members who obtained a payday loan from the B.C. Franchisees prior to November I, 2009 are "consumers" within the meaning of the BPCPA. 12. The payday loans advanced by the B.C. Franchisees to the Class members prior to November I, 2009, including the payday loans advanced to the Plaintiffs, are "consumer transactions" within the meaning of the BPCP A. 13. The B.C. Franchisees are suppliers of a consumer transaction within the meaning of the BPCP A with respect to the payday loans advanced to Class members, including the Plaintiffs, prior to November I, Money Mart Co. is also a supplier of a consumer transaction, within the meaning of the BPCPA, in respect of the payday loans advanced by the B.C. Franchisees to Class members prior to November 1,2009, including the payday loans advanced to the Plaintiffs, as Money Mart participated in those consumer transactions through its advertisement and promotion of the Money Mart payday loan business operated by the B.C. Franchisees. IS. The terms and conditions upon which the B.C. Franchisees have advanced payday loans to Class members prior to November 1, 2009, including the Plaintiffs' payday loans, pursuant to which terms the Plaintiffs and other Class members have paid interest on their payday loans at a criminal rate, are so harsh and adverse to the members K:\3649\3649p\PLEAOOOI - NofCC.docx

17 of the Class and the Plaintiffs as to be inequitable, and the making of payday loans on such terms, constitutes an unconscionable act or practice within the meaning of s. 8( I) of the BPCPA. 16. The collection by the B.C. Franchisees of the standard First Party Cheque Cashing Fees in relation to payday loans advanced to Class members prior to November 1,2009, including the Plaintiffs' payday loans, which resulted in the receipt by the B.C. Franchisees of interest at a criminal rate prohibited by s. 347(1) of the Criminal Code, constitutes an unconscionable act or practice within the meaning of s. 8(1) of the BPCPA. 17. As a result of the unconscionable acts and practices of the B.C. Franchisees as set out in paras and above 3.16, the B.C. Franchisees have received the benefit of the First Party Cheque Cashing Fees paid by the Plaintiffs and other Class members who borrowed payday loans from the B.C. Franchisees prior to November I, As a result of the unconscionable trade acts and practices of the B.C. Franchisees as set out in paras through 3.16 above, Money Mart Co. has received the benefit of payment of part of the First Party Cheque Cashing Fees collected from the Class members in respect of payday loans borrowed prior to November 1, The Plaintiffs and other Class members are entitled under s. 172(3)(a) of the BPCPA to the restoration of the benefit that the B.C. Franchisees and Money Mart Co. received as a result of the unconscionable acts and practices set out in paras and 3.16 above. Conspiracy 20. Money Mart Co. agreed with each of the B.C. Franchisees, through the execution of a Franchise Agreement with each of them, to implement a scheme to advance payday loans to Class members in order to earn a rate of return on those loans prohibited by s. 347(1) of the Criminal Code for the mutual benefit of both Money Mart Co. and the B.C. Franchisees (the "conspiracy"). K:\3649\3649p\PLEAOOOJ - NofCC.docx

18 In furtherance of the consplfacy, Money Mart Co. and the B.C. Franchisees have committed the following overt and unlawful acts: (a) (b) (c) (d) (e) Money Mart Co. developed a business model with a standard loan documentation and operating procedures for the provision of payday loans on terms that were designed to earn a return on payday loans in excess of the maximum return permitted by s. 347(1) of the Criminal Code; Pursuant to the terms of their Franchise Agreements, Money Mart Co. has required the B.C. Franchisees to advance payday loans using the standard form loan documents and standard operating procedures determined by Money Mart Co., which requirement has resulted in the advance of payday loans by the B.C. Franchisees prior to November I, 2009 on terms prohibited by s. 347(1) of the Criminal Code; the B.C. Franchisees have operated their stores and provided payday loans in accordance with the standard operating procedures and terms set by Money Mart Co., and as a result, received interest at a criminal rate on the payday loans advanced to Class members prior to November 1,2009; Money Mart Co. has assisted the B.C. Franchisees in the operation of their payday loan business, by providing administrative and technical support including access to Money Mart Co.'s transaction computer system, which the B.C. Franchisees have used to process payday loans advanced prior to November I, 2009, and as a result, through the provision of this support, Money Mart Co. has aided and abetted the B.C. Franchisees in collecting unlawful interest from the Class members in respect of their payday loans, contrary to s. 21 and 22 of the Criminal Code; and Money Mart Co. has received from the B.C. Franchisees a portion of the unlawful return that the B.c. Franchisees have collected from the Class members in respect of the payday loans advanced to them by the B.C. K:\3649\3649p\PLEAOOOI - NofCC.docx

19 Franchisees, prior to November I, 2009 and, as a result, has received a partial payment of interest at a criminal rate, contrary to s. 347(1) of the Criminal Code. 22. Both Money Mart Co. and the B.C. Franchisees knew or ought to have known that the unlawful acts each of them committed in furtherance of the conspiracy, as set out in paras and 3.21 above were likely to cause harm and injury to the Class members, including the Plaintiffs, in relation to payday loans advanced prior to November 1, As a result of the unlawful acts committed in furtherance of the conspiracy, as set out in paras and 3.21 above, the Class members, including the Plaintiffs, have suffered damage and loss through the payment of the First Party Cheque Cashing Fees for payday loans obtained prior to November I, 2009, and Money Mart Co. is liable for the entirety of this damage and loss. Joint and Several Liability of the Officers and Directors 24. David Robertson is jointly and severally liable for the acts of Justenna in advancing payday loans to Class members prior to November I, 2009 on terms that offend s. 347(1) of the Criminal Code, and collecting First Party Cheque Cashing Fees in relation to those loans that are prohibited by s. 347(1) of the Criminal Code, as these criminal acts were committed by Justenna at the direction and under the control and for the benefit of Robertson, who at all times was the directing mind of Justenna. 25. Edward Therrien and Rod Charlton are jointly and severally liable for the acts of Interior Money Marts and in advancing payday loans to Class members prior to November I, 2009 on terms that offend s. 347(1) of the Criminal Code, and collecting First Party Cheque Cashing Fees in relation to those loans that are prohibited by s. 347(1) of the Criminal Code, as these criminal acts were committed by Interior Money Marts at the direction and under the control and for the benefit of Edward K:\3649\3649p\PLEAODOI - NofCC.docx

20 - 20- Therrien and Rod Chariton, who at all times were the directing minds of Interior Money Marts and Brent Therrien is jointly and severally liable for the acts of in advancing payday loans to Class members prior to November 1, 2009 on terms that offend s. 347(1) of the Criminal Code, and collecting First Party Cheque Cashing Fees in relation to those loans that are prohibited by s. 347(1) of the Criminal Code, as these criminal acts were committed by at the direction and under the control and for the benefit of Brent Therrien, who at all times was the directing mind of Unjust Enrichment 27. Money Mart Co. has been enriched by the receipt of part of the First Party Cheque Cashing Fees collected by the B.C. Franchisees from Class members for payday loans advanced prior to November 1, 2009, including the First Party Cheque Cashing Fees collected from the Plaintiffs. 28. David Robertson has also been enriched by receipt of part of the First Party Cheque Cashing Fees collected by Justenna in respect of payday loans advanced prior to November 1,2009, including the First Party Cheque Cashing Fees collected from the Plaintiff Robinson. 29. Edward Therrien and Rod Charlton have also been enriched by receipt of part of the First Party Cheque Cashing Fees collected by Interior Money Marts and in respect of payday loans advanced prior to November 1, 2009, including the First Party Cheque Cashing Fees collected from Interior Money Marts from the Plaintiff Kask. 30. Brent Therrien has also been enriched by receipt of part of the First Party Cheque Cashing Fees collected by in respect of payday loans advanced prior to November 1,2009. K:\3649\3649p\PLEAOOO I - NoOC:C.docx