Court Urges Business Transaction Exemption for PIPEDA


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One business wants to buy the assets of another business. Assume that the consent obtained to the collection, use and disclosure of personal information from the customers of the seller did not include consent to disclose personal information on the sale of the assets of the credit union. What to do?

In a recent case, the Ontario Superior Court of Justice granted an order that the seller could disclose all personal information in its possession in order to complete and implement the purchase and sale transaction. The court further ordered that the purchaser was entitled to continue to use the personal information provided to it in a manner identical to the prior use by the seller.

The court made the order pursuant to section 7(3)(c) of the Personal Information Protection and Electronic Documents Act, 2000, c. 5 (“PIPEDA”) which states that disclosure may be made without consent in order to comply with an order.

Justice P.D. Lauwers stated that he joined in “urging that a route be provided that will permit the disclosure of the necessary personal information in such circumstances as these to avoid wasting the court’s time and the parties’ funds.”

Unlike the Alberta Personal Information Protection Act and the British Columbia Personal Information Protection Act, PIPEDA does not have a scheme to facilitate transfers of personal information in the course of completing the sale of a business.