





CITATION: Citi Cards Canada Inc. v. Pleasance, 2011
      ONCA 3



DATE: 20110106



DOCKET: C52004



COURT OF APPEAL FOR ONTARIO



Blair, Juriansz and LaForme JJ.A.



BETWEEN:



Citi Cards Canada Inc.



Applicant

(Appellant)



and



Charles
          Pleasance, The Canada Trust Company and

The Toronto-Dominion Bank



Respondents

(Respondents in Appeal)



Ian K. Latimer, for the appellant



Richard Horodyski, for the respondents in appeal, The Canada
          Trust Company and The Toronto-Dominion Bank



Heard: October 8, 2010



On appeal from the judgment of Justice D.G. Price of the
          Superior Court of Justice, dated March 24, 2010.



R.A. 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
    sheriffs 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.

[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
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.  Mrs. 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 Sheriffs 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.

[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
    appellants 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
    creditors 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 creditors 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 appellants 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.

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:

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), 93 O.R. (3d) 403 (C.A.);
Vanderbeke v. Royal Bank of
    Canada
(2006), 294 F.T.R. 216; 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.
[1]


[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 debtors 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 creditors execution on its judgment.  As the
    purpose of the Act  expressed in s. 3 cited above  indicates, what is
    balanced is the individuals right to privacy in his or her personal
    information, on the one hand, and
the organizations
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.

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
    appellants argument is correct, any organization could disclose personal
    financial information about the individual to interested third parties, without
    that individuals 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
    sheriffs 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,
[2]
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
    [debtors 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 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
    debtors 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% 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), 34 O.R. (2d)
    482 (C.A.):
Bock v. Fairborn
(1990), 40 C.P.C. (2d) 277 (Ont. Dist.
    Ct.);
Parks v. Sullivan
(1982), 29 C.P.C. 124 (Ont. Master);
Bank of
    America Trust and Savings Assn. v. Shefsky
(1997), 24 C.P.C. (4th) 135 (Ont.
    Gen. Div.);
Blastco Corp. v. Pittman Environmental Technologies Inc.
(2001),
    10 C.P.C. (5th) 106 (Ont. S.C.).

[38]

I would not interfere with the exercise of the application judges
    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.

R.A. Blair J.A.

I agree R.G. Juriansz
    J.A.

I agree H.S. LaForme
    J.A.

RELEASED:  January 6, 2011





[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.



[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
, R.S.O. 1990, c. M.40, s. 31.


