Court of Appeal considers privacy expectation of regulated businesses

In R v. Clothier, 2011 ONCA 27, the Court of Appeal for Ontario held that the “entrapment” defence did not apply to the regulatory offence of a store clerk selling cigarettes to a minor in violation of the Smoke Free Ontario Act.  The minor was a “test shopper” for the local tobacco enforcement agency.  The clerk argued that this was entrapment.  The Court held that entrapment did not apply and that government authorities can use random test shopping to monitor compliance with the Act.  Of interest from a privacy point of view is the Court’s statement that regulated businesses should expect monitoring as a consequence of doing business:

First, these stores operate in a regulated commercial environment, and operating in this regulatory environment comes with consequences.  As Cory J. said in Wholesale Travel, at p. 229: “… those who choose to participate in regulated activities have, in doing so, placed themselves in a responsible relationship to the public generally and must accept the consequences of that responsibility.”

Stores selling tobacco and their employees have this responsibility to the public.  One important consequence of this responsibility is their deemed acceptance of an undertaking to exercise reasonable care to ensure that the harm identified in the regulatory statute – here selling tobacco to minors – does not occur.  This entails a further

Those who sell tobacco products must accept a greatly diminished expectation of privacy, as some form of monitoring will be necessary to ensure that they meet their due diligence responsibilities. The monitoring is done, not to punish past conduct, as would be the case for an offence under the criminal law, but to deter harmful conduct in the future – in other words, to prevent harm to the public from the illegal sale of tobacco to

We recognize entrapment as a defence in criminal law because of our concern that random virtue testing will result in too great an invasion of personal privacy. That rationale simply does not apply in this regulatory context.

This is an interesting analysis in that it refers both to a diminished “expectation” of privacy and a diminished concern with the “invasion” of privacy in a particular context.

Banks prohibited by PIPEDA from disclosing mortgage discharge statement

In an interesting decision released today, the Ontario Court of Appeal held in Citi Cards Canada Inc. v. Pleasance, 2011 ONCA 3, that PIPEDA prohibits banks from disclosing mortgage discharge statements to a third party.

Citi had a credit card debt against Pleasance and sought to enforce judgment through a sheriff’s sale of Pleasance’s home.  But the sheriff would not act without mortgage discharge statements, which the banks refused to provide on the basis that disclosure would be in breach of privacy rights under PIPEDA.  The Court called this a “knotty and interesting question”, but upheld the lower court decision prohibiting disclosure.  The Court held that mortgage discharge statements contain “personal information” which is not publicly available, that Citi’s interests (as a third party) are not factored in the balancing of interests under PIPEDA, and that Citi could have pursued alternate remedies through a judgment debtor exam or order in aid of execution.

A link to the decision is here.