Updated Fri. Nov. 16 2007 12:09 PM ET

CTV.ca News Staff

A $150-million class action lawsuit will proceed against the Toronto Dominion Bank over allegations that Visa cardholders were charged unauthorized fees on foreign currency, the Ontario Court of Appeal said.

Chief Justice Warren Winkler gave the green light this week, effectively overturning lower court decisions to halt proceedings.

The suit was brought about by TD Visa cardholder Paul Cassano, a Windsor, Ont. resident, after a 1994 trip to New York City.

Cassano used his Visa card to pay for hotel charges in the amount of US$563.36, which was converted to CA$766.62.

The hotel mistakenly charged his card twice and he was given a credit.

However, instead of being credited in the amount of C$766.62, his credit card statement showed that he was credited with C$745.44 for the second mistaken charge.

"The central claim of the appellants (plaintiffs) is that TD breached its contract with the holders of its Visa credit cards by charging undisclosed and unauthorized fees in respect of those foreign currency transactions," court documents state.

"A 'conversion fee' and an 'issuer fee' were undisclosed and unauthorized under the terms of the relevant cardholder agreements."

TD contends the fees were included in the Visa agreement under the "exchange rate determined by the Bank" reference.

Lower courts ruled against class-action litigation because of difficulty determining damages if the bank lost.

However, Winkler disagreed, saying TD's assertion that the process of calculating damages would be costly and time-consuming was not a valid argument.

"It would hardly be sound policy to permit a defendant to retain a gain made from a breach of contract because the defendant estimates its costs of calculating the amount of the gain to be substantial," the judge wrote