Canada: Case Summary: Larizza v. The Royal Bank Of Nova Scotia

Last Updated: December 18 2017
Article by Field LLP


B. A landlord conducting a credit check on a prospective tenant without their knowledge or consent does not amount to the privacy tort of intrusion upon seclusion, as the Ontario statute authorized a credit check in the circumstances and a reasonable person would not regard this to be highly offensive, causing humiliation or anguish. 

Larizza v. The Royal Bank of Nova Scotia, 2017 ONSC 6140, per Favreau, J. [4248]


Plaintiff Larizza was taken advantage of by the Defendant Rosenberg, a fraudster. She met Rosenberg in February 2012 through an online dating service. At the time, she owned her own home and worked as an executive director at a medical center. Rosenberg misrepresented his circumstances to Larizza, claiming that he was a 56-year-old, wealthy Swiss-Canadian businessman who was heir to a fortune. In reality, he was a 69-year-old Egyptian who had been convicted of fraud many times and was not the heir to any fortune.
In July 2012, Rosenberg convinced Larizza to sell her house, quit her job and move in with him. They ended up living in a penthouse owned and managed by Defendant landlord Minto. During their time together, Larizza gave Rosenberg various sums of money, having been convinced that he needed to borrow it because his own money was tied up abroad or that he was investing the funds on her behalf.
When Larizza and Rosenberg met, he was living in a luxury apartment in the building owned by Minto. Rosenberg inquired about renting the penthouse. Minto performed a credit check on Rosenberg through Equifax and concluded that there was "insufficient" credit information on him to justify renting him the penthouse. Minto told Rosenberg that if he gave the name of someone else for a credit check they might be able to end up renting him the penthouse, so Roseberg provided Larizza's name. Without any direct communication with Larizza or getting her consent to a credit check, Minto obtained her credit report from Equifax. It showed that she had a strong credit rating, which would be sufficient for the purposes of leasing the penthouse. Larizza argued that Minto's conducting of the unauthorized credit check was contrary to Minto's policy and the Credit Reporting Act, R.S.O. 1990, c. C.33 and PIPEDA (the Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5).
Larizza signed a lease for the penthouse in May 2012. She claimed that she had no involvement in the negotiation of the lease, as that was all done by Rosenberg and that she signed the lease in a rush, believing that Rosenberg was going to be the tennant and she was only signing as an occupant. The document showed on the front page that Larizza was to be a tenant, with Rosenberg as the occupant, and she signed above the word "tenant". In February 2013, Larizza and Rosenberg advised Minto that they intended to exercise their option to extend the lease and it was extended to June 30, 2014. Rosenberg made the payments throughout the lease, until July and August 2013. At that time, Minto wrote to Rosenberg and Larizza to advise them of the default in rent and that legal action will be commenced if they did not pay it. In September 2013 Minto applied to evict Larizza and Rosenberg before the Landlord and Tenant Board. In the end, that application was dismissed because by the time it was heard, Larizza had vacated the penthouse.
In September 2012 Larizza was referred to Defendant Hoffstein, a lawyer at Fasken Martineau. When Larizza met Hoffstein, she advised that she had met Rosenberg and planned to marry him in November 2012, that he was a wealthy Swiss businessman who intended to purchase a $10 million insurance policy naming a trust for the benefit of Larizza and her two daughters as the beneficiary. She also advised Hoffstein that Rosenberg had a lawyer in Switzerland who is working on a prenuptial agreement. Hoffstein was retained by Larizza to provide estate planning advice in connection with her Will prior to her marriage and the creation of the trust that Rosenberg intended to create, and to prepare a Power of Attorney naming Rosenberg as the attorney. None of the tasks were finished because Hoffstein did not receive instructions or information that she requested that would allow her to complete those tasks. Throughout her communication with Hoffstein, Larizza was advised to prepare her Will "in contemplation of marriage" before the marriage, otherwise her current Will would be revoked upon marriage. Larizza kept putting Hoffstein off and eventually married Rosenberg in March 2014 without first advising Hoffstein.
Larizza sued the landlord Minto for breach of privacy (intrusion upon seclusion) breach of contract, negligence, negligent misrepresentation and intentional/negligent infliction of mental distress. The claim for intrusion upon seclusion was based on the allegation that Minto had conducted the credit check on her without her authority or knowledge in breach of his own policies and some statutes. Larizza also sued other entities, the claims against whom were settled by the time this application was brought. Rosenberg was noted in default.
Minto and Fasken applied for summary dismissal of the claims against them.

II. HELD:  For the Defendants, summary dismissal granted.

  1. The Court noted that the tort of intrusion upon seclusion existed, setting out the elements and commenting on the damages available:

51   The elements of intrusion upon seclusion are:

  1. The defendant's conduct must be intentional or reckless;
  2. The defendant must have invaded, without lawful justification, the plaintiff's private affairs or concerns; and
  3. reasonable person would regard invasion as highly offensive, causing humiliation, or anguish.

(See Jones v. Tsige, 2012 ONCA 32 (Ont. C.A.) at paras. 70-71.)

52   Proof of damages is not required, but the Court of Appeal has emphasized that "given the intangible nature of the interest protected, damages for intrusion upon seclusion will ordinarily be measured by a modest conventional sum": Jones v. Tsige, supra, at para. 71. Therefore, if the plaintiff can establish the three elements of the tort, she may be entitled to a modest amount of damages.

  1. The Court held that Minto had disproved some of the elements of the tort, justifying summary dismissal.
    1. The Landlord acknowledged that its conduct had been intentional and reckless, satisfying the first element of the tort.
    2. The Court rejected Larizza's argument that Minto had invaded her private affairs or concerns without lawful justification (the second element).
      1. The Credit Reporting Act was held to permit Minto to obtain the credit check, even without Larizza's permission or knowledge. S. 8(1)(d)(ii) of that act was held to explicitly permit a credit check where the person making the inquiry intends to use the information connection with the entering into a renewal or tenancy agreement. The information contained in the credit check did not contain "personal information" within the meaning of the act.
      2. The Court concluded that the credit check may have contravened PIPEDA but breach of that statute does not, in and of itself give rise to a cause of action. PIPEDA was held to contain its own scheme for complaints, investigations and resolutions.
      3. The Court held that credit checks do not give rise to a legitimate privacy interest "because they tend to contain information about dealings with third parties", relying on Powell v. Shirley, 2016 ONSC 3577 (ONT SCJ) at paragraph 87:

59   Accordingly, in my view, Minto may have contravened PIPEDA when it failed to obtain Ms. Larizza's consent prior to conducting the credit check. However, this does not end the inquiry in relation to the second element of the test. Notably, contravention of a statute on its own does not give rise to a cause of action, and PIPEDA contains its own regimen for complaints, investigations and resolutions. In addition, the second element of the test requires that the defendant invade the "private affairs or concerns" of the plaintiff. In Powell v. Shirley, 2016 ONSC 3577 (Ont. S.C.J.) at para. 87, this court considered whether the information in a credit report is the type of information over which a person has a legitimate privacy interest. The Court found that credit checks do not give rise to such an interest because they tend to contain information about dealings with third parties:

Much of the credit report relates to disclosure of the simple fact that other identified third parties had made requests to the relevant credit bureau for the provision of information concerning the plaintiffs. In my view, a request for information about the plaintiffs cannot be equated with information about the plaintiffs. Moreover, it seems to me that a record compiling details of who may have made such requests to the credit bureau, and when those requests were made, without any apparent involvement whatsoever of the plaintiffs, is not a record in respect of which the plaintiffs could or would have had any reasonable expectation of privacy.

To the extent the credit report discloses the existence of formal collection proceedings pursued by third parties against the plaintiffs, and/or judgments obtained by third parties against the plaintiffs, it should be remembered that such proceedings and judgments almost certainly would be a matter of public record. It may be true that the credit bureau makes a summary of such information more readily available than it would be if a party seeking such information otherwise had to expend the time and resources necessary to attend at each and every courthouse in Ontario or elsewhere, and perform a thorough search of court files, generally accessible to the public in an open courts system, for records of litigation, (including claims, judgments, writs of execution and other formal debt enforcement measures), relating to Mr. and/or Mrs. Powell. In my view, however, that does not change the inherently public and non-private nature of the underlying information.

It seems to me that there is a significant difference and distinction to be made between situations involving financial records relating to an individual, maintained by that individual's bank or other institution, in respect of which an individual may have a legitimate and understandable expectation of privacy, and situations where a person has dealt with a third party in an arm's length commercial transaction leaving that third party with a debt or alleged debt against the individual which it wishes to pursue. In my view, records concerning that third party's assertion of a debt, and efforts to pursue such a debt, are very unlikely to be records in respect of which the debtor or alleged debtor would have a legitimate or reasonable expectation of privacy.

60   Similar third party information is contained in Ms. Larizza's credit report. Accordingly, the request for Ms. Larizza's credit report without her consent, while it may have contravened PIPEDA, was authorized by the CRA and, given the nature of the information, in my view would not constitute and invasion of Ms. Larizza's personal affairs.

  1. The Court found that there was no basis for concluding that Minto had breached the terms of the lease, and, accordingly, the breach of contract claim failed.
  2. The case against Minto in negligence failed because Larizza could not establish that Minto owed her a duty of care, that it failed to meet the standard of care or that or that is will result in damages.
  3. The case against Minto for intentional or negligent infliction of emotional distress failed because the conduct of the landlord could not be categorized as "extreme, flagrant and outrageous" and there was no evidence that Minto conducted itself in a manner calculated to harm Larizza. Similarly, the claim of negligent misrepresentation failed because of the lack of a duty of care between Minto and Larizza.
  4. The claims against Fasken were also disproven such that summary judgment was granted. While Larizza was owed a duty of care by Fasken, the evidence established that Fasken has not breached the standard of care. There was no term of the retainer which included an obligation on the law firm to investigate Rosenberg's background. Similarly, the claim of negligent misrepresentation failed because it was not Faskens which portrayed to Larizza that Rosenberg was reputable. There are no misleading statements in that regard. The claims in breach of contract and breach of fiduciary duty also failed because of the lack of a term requiring the law firm to conduct a background check on Rosenberg.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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