Date: 20090331
Docket: T-1238-08
Citation: 2009 FC 328
Toronto, Ontario, March 31,
2009
PRESENT: The Honourable Mr. Justice Zinn
BETWEEN:
LYNNE CHERYL KATZ and
ORNO HOLDINGS LTD.
Plaintiffs
and
THE BANK OF NOVA SCOTIA,
MARIA IAFRATE and MONICA PRASAD
Defendants
REASONS FOR JUDGMENT AND JUDGMENT
[1]
Three
motions came on for hearing before the Court, in Toronto, on March
30, 2009:
a. A motion
dated the 23rd day of September 2008, on behalf of the defendants,
for an Order pursuant to Rule 181 of the Federal Courts Rules for
particulars of the allegations in the plaintiffs’ Statement of Claim, as
requested in the Demand for Particulars attached as Appendix ‘A’ to the Notice
of Motion;
b. A motion
dated the 14th day of October 2008, on behalf of the plaintiffs for
an Order pursuant to Rule 210 of the Federal Courts Rules for default
judgment against the defendants for failure to serve and file a statement of
defence within the time set out in Rule 204; and
c. A motion
dated the 27th day of February 2009, on behalf of the defendants,
for an Order pursuant to Rule 221 striking the plaintiffs’ statement of claim
for lack of subject matter jurisdiction over the claims set out therein;
The Court heard submissions on the last
motion first, and in light of my determination on that motion, the others did
not need to be addressed.
[2]
The
plaintiffs were account holders with the defendant Bank. The personal
defendants were, at the material times, branch manager and an employee in the
customer service department of the Bank’s branch at Yonge and Lawrence in Toronto, Ontario.
[3]
The
plaintiffs allege that the defendants released information contrary to their
instructions and that the defendants’ actions breached their confidentiality
and was an invasion of their privacy. It is further alleged that the
defendants failed to close the plaintiffs’ accounts as directed, causing damage
to the plaintiffs. The claims as against the personal defendants are premised
on the alternate claim that they were acting outside the scope of their authority.
[4]
The
motions were based on the Statement of Claim that issued on August 11, 2008.
On March 18, 2009, after these motions had been brought, the plaintiffs filed
an Amended Statement of Claim. The defendants are not in default of filing a
defence to that amended claim under the Federal Courts Rules and thus
the motion for summary judgment has been rendered premature as a consequence of
filing the Amended Statement of Claim. Further, counsel for the defendants
informed the Court that the amended claim responds, in part, to the motion for
particulars. In any event, the Court directed that the motion to strike be
heard first because, if successful, the remaining two motions would become moot
and unnecessary. Both parties indicated that they were prepared to argue that
motion on the basis of the recently filed Amended Statement of Claim.
Following the motion, I indicated that the motion to strike would be allowed.
These are the reasons for the determination.
[5]
The
plaintiffs’ claim is set out in the Amended Statement of Claim, filed March 18,
2009, as follows:
1. The plaintiff, Lynne Cheryl
Katz (“Katz”) claims against the defendants, jointly and severally, for
breach of confidentiality, invasion of privacy, negligence and for breach
of contract:
a) general damages in the amount
of $100,000.00,
b) special damages in an amount
to be specified before trial.
c) pre- and post-judgment
interest and legal costs pursuant to the Courts of Justice Act,
d) such other relief as this
Honourable Court may advise.
2. The plaintiff Orno Holdings
Ltd. (“corporate plaintiff”) claims against the defendants, jointly and
severally, for breach of confidentiality, invasion of privacy,
negligence and for breach of contract:
a) general damages in the amount
of $75,000.00,
b) special damages in an amount
to be specified before trial.
c) pre- and post-judgment
interest and legal costs pursuant to the Courts of Justice Act,
d) such other relief as this
Honourable Court may advise.
[6]
The
tri-partite test set out in ITO-International Terminal Operators Limited v.
Miida Electronics Inc., [1986] 1 S.C.R. 752, provides that this Court’s
jurisdiction is limited to cases where there is a statutory grant of
jurisdiction, there is an existing body of federal law essential to the
disposition of the case, and the law on which the case is based is a “law of
Canada” as the phrase is used in Section 101 of the Constitution Act, 1867.
A statement of claim should only be struck for want of jurisdiction at a
preliminary stage where the lack of jurisdiction is plain and obvious: Sokolowska
v. Canada, 2005 FCA 29.
[7]
The
plaintiffs assert that the impugned conduct of the defendants which grounds
their action is conduct by them that is contrary to the Personal Information
Protection and Electronic Documents Act, 2000, S.C. 2000 c. 5 (PIPEDA)
and to the Bank Act, S.C. 1991 c. 46. The plaintiffs submit that the
interplay of these Federal Acts provides the underpinning necessary to provide
this Court with jurisdiction, although possibly only concurrent jurisdiction,
over the claim.
[8]
PIPEDA does grant jurisdiction to
this Court to hear any matter arising out of a compliant made under that Act to
the Privacy Commissioner; however, subsection 14(1) stipulates that it is a
condition precedent to this Court having jurisdiction that a complaint has been
made to the Privacy Commissioner and the Privacy Commissioner has issued a
report. There is no allegation in the amended claim that there was any
complaint filed. In fact, Ms. Katz informed the Court at the hearing of this
motion that the plaintiffs have not filed any complaint. Accordingly, this
Court’s limited jurisdiction under PIPEDA is not engaged.
[9]
The Bank
Act regulates the creation and administration of chartered banks in Canada. The plaintiffs rely on
section 455 of that Act that provides that each Bank shall establish complaint
procedures.
|
455. (1) A bank shall
(a)
establish procedures for dealing with complaints made by persons having
requested or received products or services in Canada from a
bank;
(b) designate an
officer or employee of the bank to be responsible for implementing those
procedures; and
(c)
designate one or more officers or employees of the bank to receive and deal
with those complaints.
(2) A bank shall file with the Commissioner a copy of its
procedures established under paragraph (1)(a).
(3) A bank shall make its procedures established under
paragraph (1)(a) available
(a) in
the form of a brochure, at its branches where products or services are
offered in Canada;
(b) on
its websites through which products or services are offered in Canada; and
(c) in
written format to be sent to any person who requests them.
(4) A bank shall also make prescribed information on how
to contact the Agency available whenever it makes its procedures established
under paragraph (1)(a) available under subsection (3).
|
455. (1) La
banque est tenue :
a)
d’établir une procédure d’examen des réclamations de personnes qui lui ont
demandé ou qui ont obtenu d’elle des produits ou services au Canada;
(i) au traitement des frais à payer pour leur compte de
dépôt, pour les arrangements visés au paragraphe 452(3) ou pour leur carte de
crédit, de débit ou de paiement,
(ii) à la divulgation ou au mode de calcul du coût
d’emprunt à l’égard d’un prêt consenti par elle;
b) de
désigner un préposé — dirigeant ou autre agent — à la mise en oeuvre de la
procédure;
c) de
désigner un ou plusieurs autres préposés — dirigeant ou autre agent — aux
réclamations.
(2) La banque dépose auprès du commissaire un double de
la procédure.
(3) La banque met à la disposition du public la
procédure à la fois :
a) dans
ses succursales où sont offerts des produits ou services au Canada, sous
forme de brochure;
b) sur
ceux de ses sites Web où sont offerts des produits ou services au Canada;
c) dans un
document écrit à envoyer à quiconque lui en fait la demande.
(4) La
banque doit accompagner la procédure qu’elle met à la disposition du public
des renseignements — fixés par règlement — sur la façon de communiquer avec
l’Agence.
|
[10]
The
plaintiffs have filed complaints with the Office of the Superintendent of Financial
Institutions and with the Financial Consumer Agency of Canada with respect to
the Bank’s conduct that underlies this action. The latter agency is that
prescribed by the government to deal with complaints arising under section 455
of the Bank Act. There is no allegation in the amended claim that a
decision of either agency forms the basis of the claim.
[11]
In my
view, there is nothing in the Bank Act that grants this Court
jurisdiction over a claim by an account-holder for breach of contract,
negligence, breach of confidentiality or other tortuous conduct of the sort
alleged in the claim filed by the plaintiffs.
[12]
The
plaintiffs’ claims are essentially claims grounded in property and civil rights
against a party other than the Crown and are thus within the jurisdiction of
the Ontario Superior Court of Justice. The Federal Court has no jurisdiction
over these claims.
[13]
To the
extent that the plaintiffs have complaints relating to the improper disclosure
or use of personal information, they must first file a complaint with the
Office of the Privacy Commissioner and receive its report before this Court has
jurisdiction: See, for example, Englander v. Telus Communications Inc.,
[2004] F.C.J. No. 1935, 2004 FCA 387.
[14]
Merely
because the defendant is federal work business or undertaking does not, without
more, provide a basis for this Court‘s jurisdiction: See Gracey v. Canadian
Broadcasting Corp. (T.D.), [1991] 1 F.C. 739. Jurisdiction must be found
in either the Federal Courts Act or elsewhere in federal legislation specifically
granting this Court jurisdiction. The plaintiffs have been unable to point to
any provision either in the Federal Courts Act or elsewhere granting
jurisdiction to this Court over the claims being advanced.
[15]
The
defendants seek their costs. Ms. Katz, although she is not a practicing
lawyer, is a lawyer and thus ought to be in a better position than most
litigants to understand the niceties of jurisdictional issues. Further,
defendants’ counsel wrote to the plaintiffs on September 11, 2008, informing
them that the defendants were of the view that this action had been commenced
in the wrong Court. Ms. Katz responded by letter dated September 17, 2008,
indicating that she did not share that view. Frankly, even a cursory
understanding of the jurisdiction of the Federal Court and the Ontario Superior
Court of Justice would have been sufficient to see that the defendants’ counsel
was correct in his assessment.
[16]
It is
precisely because the lack of jurisdiction in this Court was clear, that the
defendants must be taken to task for failing to immediately bring their motion
to strike. Instead, they engaged in correspondence with the plaintiffs
regarding particulars and ultimately brought a motion for particulars before
they filed their motion to strike. Because of that delay and its resulting
actions, needless costs were incurred by both parties relating to the motion
for particulars and the corresponding default judgment motion brought by the
plaintiffs.
[17]
Accordingly,
it would be unjust that the plaintiffs be held responsible to the defendants
for this unnecessary part of this litigation. As a result, there will be no
order as to costs; each party shall bear its own costs.
JUDGMENT
THIS COURT
ORDERS AND ADJUDGES that:
(a)
The
defendants’ motion to strike the Amended Statement of Claim is granted, without
leave to further amend, and this action is dismissed;
(b)
The
defendants’ motion for particulars is dismissed as moot;
(c)
The
plaintiffs’ motion for default judgment is dismissed as moot; and
(d)
Each party
shall bear its own costs of these motions and this action.
"Russel
W. Zinn"
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