Grant v. Equifax Canada Co., 2015 ONSC 6745

Grant v. Equifax Canada Co. et al.

[Indexed as: Grant v. Equifax Canada Co.]

Ontario Reports

Ontario Superior Court of Justice,

Barnes J.

November 2, 2015

127 O.R. (3d) 620 | 2015 ONSC 6745

Case Summary

Limitations — Consumer reporting — Two-year limitation period in Limitations Act not applying to determine time frame for reporting consumer debts under Consumer Reporting Act — Applicant's application for order that consumer reporting agencies remove debts over two years old from his credit report dismissed — Consumer Reporting Act, R.S.O. 1990, c. C.33 — Limitations Act, 2002, S.O. 2002, c. 24, Sch. B.

The applicant brought an application for an order that the respondent consumer reporting agencies remove debts over two years old that were shown on his credit report. He argued that it is unfair for consumer debts over two years old to be reported on consumer credit reports because after the two-year limitation period in the Limitations Act, 2002 has expired, the debtor cannot bring an action to collect the debt.

Held, the application should be dismissed.

The two-year limitation period set out in the Limitations Act, 2002 cannot be applied to determine the time frame for reporting consumer debts under the Consumer Reporting Act ("CRA"). There is nothing in the Limitations Act, 2002 that extends its application to the CRA, and nothing in the CRA that contemplates application of the provisions of the Limitations Act, 2002. If it was the intention of the legislature that the provisions of the Limitations Act, 2002 apply to the CRA, it would have expressly said so.

Cases referred to

Hunter v. Southam Inc., 1984 33 (SCC), [1984] 2 S.C.R. 145, [1984] S.C.J. No. 36, 11 D.L.R. (4th) 641, 55 N.R. 241, [1984] 6 W.W.R. 577, J.E. 84-770, 33 Alta. L.R. (2d) 193, 55 A.R. 291, 27 B.L.R. 297, 14 C.C.C. (3d) 97, 2 C.P.R. (3d) 1, 41 C.R. (3d) 97, 9 C.R.R. 355, 84 D.T.C. 6467; Matutschovsky v. Equifax Canada Inc., [2009] O.J. No. 4600, 2009 ONCA 769, 181 A.C.W.S. (3d) 901, affg [2009] O.J. No. 1266, 2009 13619, 176 A.C.W.S. (3d) 90 (S.C.J.) [Leave to appeal to S.C.C. refused [2009] S.C.C.A. No. 533]; [page621] York Condominium Corp. No. 382 v. Jay-M Holdings Ltd. (2007), 84 O.R. (3d) 414, [2007] O.J. No. 240, 2007 ONCA 49, 220 O.A.C. 311, 59 C.L.R. (3d) 15, 36 C.P.C. (6th) 233, 30 M.P.L.R. (4th) 161, 154 A.C.W.S. (3d) 1205

Statutes referred to

Canadian Charter of Rights and Freedoms, s. 15

Consumer Reporting Act, R.S.O. 1990, c. C.33 [as am.], ss. 8(1)(d), 9(1), (3) [as am.]

Limitations Act, 2002, S.O. 2002, c. 24, Sch. B [as am.]

Limitation Act, S.B.C. 2012, c. 13 [as am.], s. 27

APPLICATION for an order that the respondents remove debts over two years old from the applicant's credit report.

Gary Grant, self-represented.

Stephen Schwartz, for Equifax Canada Co.

Alan Melamud, for Trans Union.

Meagan Williams and Ronald Carr, for Ministry of Government Services and Consumer Services.

BARNES J.: —

Introduction

1Mr. Gary Grant (the "applicant") seeks an order that Equifax Canada Inc. and TransUnion of Canada (the "consumer reporting agencies") remove debts over two years old that are currently shown on the applicant's credit report.

2The applicant has added the Ministry of Government and Consumer Services (the "ministry") as a party to this application; however, he seeks no specified relief in relation to the ministry.

3The applicant relies on the provisions of the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B (the "Limitations Act"), which governs legal proceedings, to interpret the provisions of the Consumer Reporting Act, R.S.O. 1990, c. C.33 (the "CRA"), which governs consumer reporting.

4I have determined that the applicant's application shall be dismissed.

The Issue

5The CRA establishes a regulatory framework for ensuring that the consumer reports are current, accurate and provided for limited purposes. Section 9(3) of the CRA sets a seven-year time frame for reporting consumer debts on a consumer credit report. The Limitations Act governs the commencement of legal proceedings and sets a two-year limitation period for the commencement of legal proceedings in most matters.

6The issue is whether the two-year limitation period set in the Limitations Act can be applied to determine the time frame [page622] for reporting consumer debts under the CRA. I conclude that the answer to this question is no.

Background Facts

7In 2014, the applicant contacted the consumer reporting agencies and complained that three entries in his consumer reports had been wrongly reported. He also said that a debt owed to the Family Responsibility Office has been paid. The applicant requested that two other entries, which were unpaid accounts held by the J.P. Morgan Chase bank, not be reported because they were more than two years old.

8J.P. Morgan Chase did not confirm the existence of the unpaid debts and, therefore, those entries were removed. The Family Responsibility Office stated that the applicant owed $167,000, as reported. Therefore, the consumer reporting agencies did not remove this debt from the applicant's credit report.

9In February 2015, the applicant wrote to the ministry complaining that the credit reporting agencies were reporting debts that were more than two years old. The ministry responded that the two-year limitation period set out in the Limitations Act did not apply to the CRA. Therefore, the ministry refused to order the consumer reporting agencies to remove debts over two years old from the applicant's credit report.

Position of the Parties

10According to the applicant, the two-year limitation period for commencing an action under the Limitations Act should apply to the time frame for reporting consumer debts under the CRA. The applicant argues that the best evidence of the existence of a disputed debt is when judgment is obtained for that debt.

11The applicant explains that is unfair for consumer debts over two years old to be reported on consumer credit reports. This is because after the two-year limitation period under the Limitations Act has expired, the debtor cannot bring an action to collect the debt. Therefore, a debt that can no longer be collected should not be reported on a credit report.

12Section 9(1) of the CRA requires the consumer reporting agency to adopt procedures necessary to ensure accuracy and fairness in the contents of its consumer reports. The applicant submits that since no court action can be commenced to recover debts over two years old, any disputed debts over two years old recorded on consumer reports are not the most accurate record of the debt. He explains that for reported debt over two years old, the most accurate record of such a debt is a debt that has [page623] been confirmed by an order of a court. Therefore, the applicant argues that the consumer reporting agencies are not in compliance with s. 9(1) of the CRA when they report consumer debts over two years old which have not been confirmed by the order of a court.

13According to the applicant, the practice of reporting debts over seven years old on consumer credit reports is unfair because the consumer reporting agencies include debts for which the debtors have no legal cause of action after two years. Therefore, the ability of consumers to borrow money or conduct other business is adversely impacted by consumer credit reports that include records of debts for which debtors have no legal recourse. The applicant submits that this is patently unfair and, therefore, the contents of the consumer credit reports do not comply with requirement of fairness stipulated in s. 9(1) of the CRA.

14The applicant submits that in circumstances such as this, where the provisions of the CRA result in unfairness to the consumer, this court must provide an equitable remedy. The equitable remedy sought is an order that consumer reporting agencies cannot report consumer debts over two years old on consumer credit reports.

15The applicant also submits that since the consumer reporting agencies have applied the provisions of the CRA in a manner inconsistent with the provisions of the Limitations Act, his rights under s. 15 of the Canadian Charter of Rights and Freedoms have been violated.

16The consumer reporting agencies submit that the Limitations Act sets out the limitation period for commencing a legal action in Ontario. The CRA sets out the statutory framework for consumer credit reporting in Ontario.

17According to the consumer reporting agencies, the Limitations Act and the CRA have two distinct legislative purposes. The Limitations Act does not apply to the CRA and the CRA does not apply to the Limitations Act and in the absence of a statutory provision permitting such application it is unlawful to apply the provisions of one statute to another.

18The consumer reporting agencies described internal procedures that they have in place to ensure that credit reports are accurate and fair. These include debt verification and confirmation procedures. The consumer reporting agencies submit that they have complied with the requirements for fairness and accuracy in consumer credit reporting as stipulated under s. 9(1) of the CRA.

19The consumer reporting agencies submit that because the applicant has not brought a constitutional challenge against any [page624] provisions of the CRA and their actions do not constitute governmental actions, the Charter, therefore, does not apply to their actions.

20The ministry adopts the arguments put forth by the consumer agencies and points out that since the applicant seeks no relief against the ministry the applicant's application against the ministry should be dismissed.

Analysis

21I have determined that the applicant's application shall be dismissed. At the crux of the application is the question of whether the provisions of the Limitations Act can be applied to the CRA.

22The modern approach to statutory interpretation is articulated by the Ontario Court of Appeal in York Condominium Corp. No. 382 v. Jay-M Holdings Ltd. (2007), 84 O.R. (3d) 414, [2007] O.J. No. 240, 2007 ONCA 49, at paras. 11-15:

[T]he words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

23There is nothing in the Limitations Act that extends its application to the CRA. There is nothing in the CRA that contemplates application of the provisions of the Limitations Act.

24The Limitations Act governs the enforcement of debts and civil proceedings. The CRA governs reporting of debts on consumer reports. The Limitations Act and the CRA have two entirely different purposes. There is no cross-pollination between the purposes. Therefore, the two-year limitation period for the enforcement of civil debts under the Limitations Act has no application to the CRA.

25If it was the intention of the legislature that the provisions of the Limitations Act apply to the CRA, it would have expressly stated so. The applicant refers to the British Columbia Limitation Act, S.B.C. 2012, c. 13 as support for his position; however, in my view it does not. Section 27 of the British Columbia Limitation Act expressly extends the limitation period to "non-judicial remedies". The Limitations Act contains no such provision.

26Section 8(1)(d) of the CRA stipulates that the purpose of consumer reports is to provide information to facilitate an array of transactions. Debt reporting is not intended to be a way to enforce a debt. Justice Brown, in Matutschovsky v. Equifax Canada Inc., [2009] O.J. No. 1266, 2009 13619 (S.C.J.), at para. 36, affd [2009] O.J. No. 4600, 2009 ONCA 769, leave to appeal to S.C.C. refused [2009] S.C.C.A. No. 533, [page625] reiterates the separation between consumer reporting and court enforcement of debts and judgments as follows:

[T]he [CRA] is clear that consumer reporting agencies can report on a person's credit history and status, regardless of whether any indebtedness has resulted in a judgment. Second, sections 9(3)(c) and (d) [of the CRA] prescribe how long reports of judgments may remain on a consumer report; they do not proscribe reporting on a debt before it results in a judgment.

27The applicant is not challenging the constitutional validity of either the Limitations Act or the CRA. The applicant is not seeking any relief against the ministry. As noted by the Supreme Court of Canada in Hunter v. Southam Inc., 1984 33 (SCC), [1984] 2 S.C.R. 145, [1984] S.C.J. No. 36, the purpose of the Charter is to constrain governmental action. The consumer reporting agencies are not an arm of government. The actions complained about are not governmental action. They are actions of private sector actors in compliance with legislation enacted by the government. Since the constitutional validity of the legislation is not challenged by the applicant, the Charter does not apply to this case.

28The consumer reporting agencies have acted in compliance with the provisions of the CRA. It is not the intention of the legislature that the provisions of the Limitations Act apply to the CRA. Under these circumstances, even if an equitable remedy was available, the need for its application does not arise on these facts.

29The applicant's application is dismissed. If there is no agreement on costs, the parties shall submit a costs outline of no more than two pages within 15 days from the date of this judgment.