Canada: Financial Institutions Cannot Disclose Personal Information to Facilitate Collection of Debt

On January 6, 2011, the Ontario Court of Appeal upheld a decision of the Superior Court to the effect that the Personal Information Protection and Electronic Documents Act (PIPEDA), did not permit a financial institution to disclose an individual's mortgage statement to a third party for the purpose of facilitating the enforcement of that party's rights as a judgment creditor.¹

Citi Cards Canada Inc. sought to have Mr. Pleasance's property sold in order to satisfy a judgment held against him. The sheriff required mortgage discharge statements from Canada Trust and Toronto-Dominion Bank (collectively the "Banks"), both of whom held mortgages against the property. The Banks refused to provide the statements on the basis that doing so would be a violation of Mr. Pleasance's privacy rights. Citi applied to the Court for a declaration that the Banks were permitted to disclose the mortgage statements and an order compelling them to do so. Although Citi could have requested an order permitting it to examine Mr. Pleasance or other parties with relevant information, Citi choose not to do.

The Court confirmed that the mortgage statements contained 'personal information' as defined in PIPEDA. The Court also held that whether or not Mr. Pleasance had an obligation to disclose the information was irrelevant to the consideration of whether or not the Banks were "required by law" to do so. Finding no court order or principle of law that required the Banks to disclose the information, the Court held that the Banks' disclosure of the mortgage statements would not have been permissible under PIPEDA.

Further, the Court of Appeal affirmed the decision of the lower court not to order the Banks to be examined for the purpose of the collection of the debt. This decision was based, in part, on a concern for the privacy rights of Ms. Pleasance, who held a 50% interest in the property at issue.

This decision is an important one for all organizations in Canada that are subject to PIPEDA. Canadian companies regularly receive requests for information about individuals from other entities that are engaged in litigation with those individuals. It is important to recognize, as this decision does, that the fact that legal proceedings are pending does not mean that an organization that is not part of those proceedings may disclose personal information.

Footnotes

1. Citi Cards Canada Inc. v. Pleasance, 2011 ONCA 3.

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