Citi Cards Canada Inc. v. Pleasance et al. [Indexed as: Citi Cards Canada Inc. v. Pleasance]
103 O.R. (3d) 241
2011 ONCA 3
Court of Appeal for Ontario,
Blair, Juriansz and LaForme JJ.A.
January 6, 2011
Debtor and creditor -- Privacy -- Judgment creditor's attempts to enforce judgment through sheriff's sale of debtor's home frustrated by sheriff's refusal to act on writ of execution without mortgage discharge statements from mortgagees of property -- Judgment creditor applying unsuccessfully for order requiring mortgagees to produce debtor's mortgage statements -- Application judge not erring in finding that disclosure was prohibited by Personal Information Protection and Electronic Documents Act -- Mortgage statements constituting "personal information" of debtor -- Exemptions in s. 7(3)(c) and (i) of Act not applying -- Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5, ss. 2(1), 7(3).
The applicant attempted to enforce a credit card-related judgment against the respondent P through a sheriff's sale of P's home. The sheriff refused to act on the writ of execution without mortgage discharge statements from the mortgagees of the property. When the mortgagees refused to provide that information to the applicant, the applicant brought an application for an order requiring production of the statements. The application was dismissed. The applicant appealed.
Held, the appeal should be dismissed.
The application judge did not err in finding that disclosure was prohibited by the Personal Information Protection and Electronic Documents Act, ss. 2(1), 7(3). The mortgage discharge statements were "personal information" of P as defined in s. 2(1) of the Act. The information was collected and used by the mortgagees for purposes of administering the mortgage; it was not collected or used for purposes of facilitating another judgment creditor's execution on its judgment. The Act balances the individual's right to privacy in his or her personal information and the organization's need to collect or use that information. It does not contemplate a balancing between the privacy rights of the individual and the interests of a third-party organization that may by happenstance have commercial dealings with the individual that make the targeted information attractive to it. Neither the exemption in s. 7(3)(c) of the Act (namely, that disclosure is required to comply with a court order) nor the exemption in s. 7(3)(i) (namely, that disclosure is required by law) applied. In view of the application judge's correct decision that the Act prohibited the mortgagees from disclosing the mortgage statements, it was not an error to require the applicant to pursue another available alternative remedy, i.e., a motion pursuant to rule 60.18(6) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 to examine P's wife, who was a joint owner of the home.
APPEAL from the judgment of Price J., [2010] O.J. No. 1175, 2010 ONSC 1124 (S.C.J.) dismissing an application for an order requiring the respondents to produce mortgage discharge statements.
Cases referred to Bank of America Trust and Savings Assn. v. Shefsky, [1997] O.J. No. 3755, 45 O.T.C. 304, 4 C.B.R. (4th) 32, 24 C.P.C. (4th) 135 (Gen. Div.); Blastco Corp. v. Pittman Environmental Technologies Inc., [2001] O.J. No. 1519, [2001] O.T.C. 285, 10 C.P.C. (5th) 106, 104 A.C.W.S. (3d) 878 (S.C.J.); Bock v. Fairborn, [1990] O.J. No. 159, 40 C.P.C. (2d) 277, 19 A.C.W.S. (3d) 524 (Dist. Ct.); [page242] C.I.B.C. v. Sutton (1981), 1981 CanLII 1886 (ON CA), 34 O.R. (2d) 482, [1981] O.J. No. 3150, 126 D.L.R. (3d) 330, 21 C.P.C. 303, 10 A.C.W.S. (2d) 382 (C.A.); Parks v. Sullivan, [1982] O.J. No. 2265, 29 C.P.C. 124 (Master); Royal Bank of Canada v. Welton (2009), 93 O.R. (3d) 403, [2009] O.J. No. 209, 2009 ONCA 48, 244 O.A.C. 262, 185 C.R.R. (2d) 2, 306 D.L.R. (4th) 487, 174 A.C.W.S. (3d) 270; Vanderbeke v. Royal Bank of Canada, [2006] F.C.J. No. 871, 2006 FC 651, 294 F.T.R. 216, 149 A.C.W.S. (3d) 180
Statutes referred to Mortgages Act, R.S.O. 1990, c. M.40, ss. 1, 31 [as am.] Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5, ss. 2(1) [as am.], 3, 4(1), 7 [as am.], (3) [as am.], (c), (i)
Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 60.18(6), (a)
Ian K. Latimer, for appellant. Richard Horodyski, for respondents in appeal The Canada Trust Company and The Toronto-Dominion Bank.
The judgment of the court was delivered by
BLAIR J.A.: -- Overview
[1] The knotty and interesting question to be determined on this appeal is of some importance to debtor/creditor relations and, particularly, to financial institutions that advance funding in that milieu. The issue is whether a judgment creditor is entitled to obtain a mortgage statement, unrelated to the judgment debt, from a third-party creditor of the debtor so that the creditor can pursue a legal remedy to enforce its judgment. The application judge held that the provisions of the Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5, s. 7 ("PIPEDA") prohibited such disclosure.
[2] Citi Cards has a credit card-related judgment against Mr. Pleasance in the amount of $11,039.77. It sought to enforce that judgment through a sheriff's sale of the Pleasance home. But the sheriff would not act on the writ of execution without mortgage discharge statements from the mortgagees of the property, The Canada Trust Company and The Toronto-Dominion Bank. The mortgagees refused to provide the information to the appellant, however, and Citi Cards' efforts to enforce its judgment in this fashion have been stymied to date. [page243]
[3] We are told that the furnishing of mortgage discharge statements in similar situations is a matter of uneven treatment in Ontario. Some financial institutions will provide them; some will not. The respondents fall into the latter category.
[4] Justice Price dismissed Citi Cards' application for an order requiring the mortgagees to produce the statements on the basis that they contain "personal information" of the judgment debtor and PIPEDA therefore prohibits the respondents from releasing the information. He also ruled that the appellant had an alternative remedy available to it, namely, a motion pursuant to rule 60.18(6) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 to examine Bibi Pleasance -- the wife of the debtor, who was also joint owner of the home -- and that the application should be adjourned to enable her to be served with notice of the proceeding since her privacy interests may be affected as well.
[5] I would dismiss the appeal for the reasons that follow.
Facts
[6] Citi Cards obtained judgment against Mr. Pleasance on November 16, 2004. It filed a writ of seizure and sale, and sought to have the sheriff seize and sell the Pleasances' home at 3011 Saracen Court, Mississauga in order to satisfy the judgment. Although he is thought to be somewhere in Alberta, Mr. Pleasance could not be located for purposes of service, and he is unrepresented in the proceedings. Ms. Pleasance lives in the targeted premises, but no attempt has been made to add her as a party to the action or to obtain an order under rule 60.18(6) to examine her as a non-party.
[7] Canada Trust holds a first mortgage against the property in the amount of $141,000, and Toronto-Dominion Bank a second mortgage in the amount of $90,000. I shall refer to them, together, as "the Banks".
[8] Citi Cards' conundrum is both practical and legal: the sheriff requires mortgage discharge statements from the mortgagees showing outstanding balances on the encumbrances before commencing a sheriff's sale of the property. The respondents refused to provide such statements. They took the position that to do so might breach the privacy rights of Mr. Pleasance -- much less Bibi Pleasance -- under PIPEDA. Citi Cards therefore sought (a) a declaration that Citi Cards was entitled to the statements sought; (b) a declaration that the respondents were obliged to provide the statements to Citi Cards because it is a judgment creditor of one of the mortgagors; and (c) an order compelling the respondents to provide the statements. [page244]
[9] However, Citi Cards has made no attempt either to examine Mr. Pleasance as a judgment debtor or to examine Bibi Pleasance as a non-party. The appellant's explanation for not having pursued Mr. Pleasance is set out in its factum as follows:
Citi did not want to try to obtain the Statements from Charles by conducting an examination in aid of execution. This examination is usually a very lengthy and costly process because judgment debtors who own real property generally try to frustrate a creditor's ability to enforce its judgment by evading personal service of the notice of examination, failing to attend the examination, or agreeing to and then neglecting the creditor's request to provide documentary information. An attempt to obtain the Statements as part of an examination in aid of execution could cost more than the Judgment debt.
[10] While this cri de coeur may be born out of experience, and provide an understandable practical reason for the appellant's tactics, it does not provide an answer in law. With respect to Bibi, the appellant takes the position that her presence in the proceedings is simply not necessary to enable the court to adjudicate effectively and completely on the issues raised.
The Decision of the Application Judge
[11] The application judge dealt with three issues that are pertinent to the appeal in the course of his reasons.
[12] First -- in the absence of default under the mortgages -- he properly rejected Citi Cards' argument that it was a "mortgagor" within the meaning s. 1 of the Mortgages Act, R.S.O. 1990, c. M.40 and therefore entitled to redeem the mortgages pursuant to s. 31. The appellant repeated this argument in its factum, but Mr. Latimer fairly conceded the point during oral argument and did not pursue it further on appeal.
[13] Secondly, the application judge held that PIPEDA prohibits the Banks from disclosing the mortgage statements to Citi Cards for the purpose of facilitating the enforcement of its rights as a judgment creditor. He dismissed the application for the declaratory relief referred to above. Whether he was correct in this regard is the principal issue for determination on the appeal.
[14] Finally, the application judge concluded that he would not make the order requiring production of the statements to the appellant, in any event, because Citi Cards had another practical remedy available that did not impinge upon the privacy rights of the debtor: it could seek an order for the examination of Bibi Pleasance in aid of execution, pursuant to rule 60.18(6)(a). He granted leave to Citi Cards to amend its Notice of Application to seek such an order and adjourned that aspect of the proceedings to be returned on notice to Ms. Pleasance. [page245]
Analysis
The application of PIPEDA
[15] Whether the provisions of PIPEDA prohibit the Banks from disclosing the mortgage statements to the appellant depends upon whether the information contained in the sought-after mortgage statements is "personal information" within the meaning of the Act and whether any of the PIPEDA exemptions apply to permit disclosure. These questions must be assessed in light of the purpose of the legislation, which is stated in s. 3 to be the following:
- The purpose of this Part is to establish, in an era in which technology increasingly facilitates the circulation and exchange of information, rules to govern the collection, use and disclosure of personal information in a manner that recognizes the right of privacy of individuals with respect to their personal information and the need of organizations to collect, use or disclose personal information for purposes that a reasonable person would consider appropriate in the circumstances.
[16] In short, PIPEDA seeks to balance the privacy rights of individuals in their own personal information with the needs of organizations to collect, use or disclose personal information for reasonable purposes. Generally speaking, in my view, those "reasonable purposes" will relate to the needs of the organization.
[17] PIPEDA prohibits organizations from disclosing personal information without the knowledge or consent of the affected individual unless disclosure is permitted by one of the exemptions provided in s. 7(3). Here, Citi Cards relies upon two of those exemptions, namely, that the disclosure is required to comply with an order of the court (para. (c)) and that disclosure is required by law (para. (i)).
[18] The relevant portions of s. 7(3) state:
7(3) For the purpose of clause 4.3 of Schedule 1, and despite the note that accompanies that clause, an organization may disclose personal information without the knowledge or consent of the individual only if disclosure is . . . . . (c) required to comply with a subpoena or warrant issued or an order made by a court, person or body with jurisdiction to compel the production of information, or to comply with rules of court relating to the production of records; . . . . . (i) required by law.
[19] It is accepted that PIPEDA applies to banks: see Royal Bank of Canada v. Welton (2009), 2009 ONCA 48, 93 O.R. (3d) 403, [2009] O.J. No. 209 (C.A.); Vanderbeke v. Royal Bank of Canada, 2006 FC 651, [2006] F.C.J. No. 871, 294 F.T.R. 216 (F.C.); [page246] Officer of the Privacy Commissioner of Canada, PIPEDA Case Summary #2005-312. This is consistent with s. 4(1) of the Act, which states in part:
4(1) This Part applies to every organization in respect of personal information that (a) the organization collects, uses or discloses in the course of commercial activities[.]
[20] As the application judge noted, "[t]he Banks collect and use the kind of information they possess about Mr. Pleasance in the course of their commercial activity of mortgage lending".
Personal information
[21] I also agree with the application judge that the information Citi Cards seeks from the Banks is "personal information" of the debtor. "Personal information" is defined in s. 2(1) of the Act. It "means information about an identifiable individual". [See Note 1 below]
[22] This is a very elastic definition and should be interpreted in that fashion to give effect to the purpose of the Act. There can be no doubt that financial information pertaining to a debtor, collected and used by a financial institution in the course of a mortgage transaction -- including the particulars of and the balance owing on the debtor's mortgage -- is "information about an identifiable individual". Current mortgage balances are not information that is publicly available.
[23] This information is collected and used by the Banks for purposes of administering the mortgage; it is not collected or used for purposes of facilitating another judgment creditor's execution on its judgment. As the purpose of the Act -- expressed in s. 3 cited above -- indicates, what is balanced is the individual's right to privacy in his or her personal information, on the one hand, and the organization's need to collect or use the information, on the other hand. The Act does not contemplate a balancing between the privacy rights of the individual and the interests of a third-party organization that may by happenstance have commercial dealings with the individual that make the targeted information attractive to it. [page247]
The exemptions
[24] Finally, like the application judge, I do not accept that any of the s. 7(3) exemptions apply to authorize disclosure of the mortgage statements to Citi Cards. Neither the "compliance with a court order" nor the "required by law" exemption assists the appellant, in my opinion.
[25] The "order" requiring compliance, upon which Citi Cards relies, is the order sought on this application. It is circular to argue that the Banks are required to disclose the mortgage statements because disclosure is required by an order not yet made. Even a liberal interpretation of the legislation cannot lead to such a pliant result.
[26] Nor do I accept that the "required by law" exemption applies.
[27] Citi Cards submits that the application judge erred in concluding that the exemption only relates to the "organization" in question. Instead, Citi Cards contends, the exemption must be broadly interpreted and should apply whenever the "organization" or the "individual" is required by law to disclose the personal information. In the present context, the argument goes, Mr. Pleasance would be required by law to disclose the balance outstanding on his mortgages to Citi Cards -- if examined in aid of execution -- and therefore the Banks should be required to do so as well. There is no good reason why the Banks should need or require the consent of the debtor to disclose information that the debtor is required by law to disclose, the appellant concludes, and PIPEDA was never intended to be used as a shield by an individual to prevent third parties from disclosing personal information that the individual is required by law to produce.
[28] There are several flaws in this argument.
[29] First, it is inconsistent with the plain wording of s. 7(3) of the Act. "An organization may disclose personal information . . . only if the disclosure is [authorized by one of the exemptions]" (emphasis added). Clearly, the disclosure that is the subject of the listed exemptions is the disclosure of the organization and not that of the individual whose information is in play.
[30] This makes sense. Had Parliament intended that organizations would be required to disclose personal information of an individual in circumstances where, in a commercial context, the individual might be required to do so, it could easily have dispensed with the need for consent and created another exemption in those circumstances. Parliament did not do so. Moreover, if the appellant's argument is correct, any organization could [page248] disclose personal financial information about the individual to interested third parties, without that individual's consent, any time there is an outstanding judgment against the individual. Such a result would effectively negative the protection afforded to the privacy rights of individuals pursuant to PIPEDA.
[31] Secondly, while Mr. Pleasance might be required to disclose to Citi Cards the particulars of his mortgages -- including the balances required to discharge them -- pursuant to an order made in aid of execution, it is not clear that he is "required by law" to volunteer that information in the absence of such an order. No such order has been made here.
[32] Lastly, the disclosure that is "required by law", as contemplated by s. 7(3)(i), must be required by law independently of PIPEDA. PIPEDA itself does not require disclosure in the commercial context; rather, it creates a framework in which personal information -- otherwise prohibited from being disclosed -- may be disclosed if one of the exemptions applies. I know of no law requiring a financial institution to disclose mortgage statements to an unsecured judgment creditor seeking to enforce its remedy by way of sheriff's sale in the absence of default under the mortgage and steps taken by the mortgagee to enforce the mortgage by way of Notice of Sale, [See Note 2 below] and counsel have not put forward any.
[33] The appellant suggests, again, that because rule 60.18(6)(a) permits the court to make an order in aid of execution for the examination of a person other than the debtor "who the court is satisfied may have knowledge of the [debtor's debts]", the application judge had a lawful basis and the authority to order the Banks to provide the mortgage statements and, therefore, that they should be "required by law" to do so. But it does not follow that because the Banks might be ordered to disclose, they are presently "required by law" to do so. This argument, again, has the tinge of circularity to it that was rejected in another context above.
[34] For all of the foregoing reasons, I am satisfied that the Banks are prohibited by the provisions of PIPEDA from disclosing the information sought.
Order in aid of execution: rule 60.18(6)(a)
[35] The appellant sought an order directing the Banks to provide the statements to it and to its lawyers. Whether that order [page249] was sought pursuant to rule 60.18(6)(a) is not clear, because the Notice of Application makes no reference to the rule. However, the application appears to have proceeded on that basis, and the application judge declined to exercise his discretion to make such an order against the Banks because he was of the view that Citi Cards had an adequate alternate remedy, namely, a motion to obtain similar relief against the debtor's wife, Bibi Pleasance. He therefore granted the appellant leave to amend the Notice of Application to seek a rule 60.18(6)(a) order against Ms. Pleasance and adjourned that part of the proceeding pending service of notice on her.
[36] Citi Cards submits that the application judge improperly exercised his discretion in refusing to order the Banks to disclose the statements.
[37] There may well be situations where a financial institution could be ordered to make such information available as the result of a rule 60.18(6)(a) motion. It is not necessary here to consider the "ifs, when, and in what circumstances" such an order might be made, because I am not satisfied that the application judge erred in the exercise of his discretion. He was rightly concerned about the privacy rights of Ms. Pleasance -- she holds a 50 per cent interest in the property sought to be sold -- as well as the privacy rights of Mr. Pleasance. In view of his correct decision that PIPEDA prohibits the Banks from disclosing the mortgage statements, it was not an error in the circumstances to require the appellant to pursue another available alternate remedy in lieu of making the order sought. There is support for the proposition that a creditor should exhaust all other reasonable means available before a rule 60.18(6)(a) order is made: see C.I.B.C. v. Sutton (1981), 1981 CanLII 1886 (ON CA), 34 O.R. (2d) 482, [1981] O.J. No. 3150 (C.A.): Bock v. Fairborn, [1990] O.J. No. 159, 40 C.P.C. (2d) 277 (Dist. Ct.); Parks v. Sullivan, [1982] O.J. No. 2265, 29 C.P.C. 124 (Master); Bank of America Trust and Savings Assn. v. Shefsky, [1997] O.J. No. 3755, 24 C.P.C. (4th) 135 (Gen. Div.); Blastco Corp. v. Pittman Environmental Technologies Inc., [2001] O.J. No. 1519, 10 C.P.C. (5th) 106 (S.C.J.).
[38] I would not interfere with the exercise of the application judge's discretion in these circumstances.
Disposition
[39] For the foregoing reasons, I would dismiss the appeal.
[40] In accordance with the parties' agreement, there will be no costs of the appeal.
Appeal dismissed.
Notes
Note 1: The definition excludes "the name, title or business address or telephone number of an employee of an organization". That exclusion has no bearing on this appeal, however.
Note 2: In such circumstances, the mortgagee is required to give notice to execution creditors who have filed writs of execution, as Citi Cards has done here: Mortgages Act, s. 31.