The B.C. Court of Appeal struck down a New Westminster bylaw Thursday that requires second-hand dealers and pawnshops to automatically pass along personal information to police about every borrower and seller.

The ruling will apply to all B.C. municipalities except Vancouver, which has its own city charter, while other municipalities rely on the Community Charter for their powers.

The court found that when New Westminster enacted the bylaw, it exceeded the powers given to it by the legislature.

James Yardley, a lawyer who represented New Westminster at the appeal hearing last April, said he would discuss the ruling with the city. "The decision is somewhat complex," he said.

New Westminster police and the City of Vancouver did not respond to requests for comment.

The goal of the bylaw was to help police locate stolen property and identify those seeking to dispose of it. The collection of personal information allowed police to monitor clients of a second-hand business and to disseminate the information without restriction.

The appeal was launched by Royal City Jewellers & Loans Ltd., which argued the disclosure provisions violated privacy rights given the municipality by the legislature.

The company had pointed out in court that less than one per cent of the items pawned at its shop are determined by police to be stolen.

"Our loss last year [from stolen property] was zero," said Michael Isman, general manager of the Royal City pawnshop, which has been in business 52 years and is the largest in Canada. He is also president of the B.C. Pawnbrokers Association.

"It's a gross abuse of every pawnshop's customers," he said of the requirement to report to police each customer's personal information, including name, address, occupation, government-issued ID and physical description.

"You can't get any other store's customer list without a search warrant," Isman said, adding his store will continue collecting customer information but now won't automatically forward it to police within 24 hours.

Police still will be able to obtain a search warrant to access customer information if there are grounds to suspect an item is stolen, he said.

The company had appealed a lower court ruling in which a judge dismissed a petition seeking a declaration that the bylaw was unenforceable and invalid.

The appeal court concluded "the requirement to collect, record and transmit that additional information to the police is beyond the power of New Westminster, because it is not granted by the Community Charter or any other enactment."

Micheal Vonn, policy director of the B.C. Civil Liberties Association, which was granted intervenor status for the appeal, said the BCCLA was pleased with the ruling.

"We've been deeply concerned about the proliferation of these surveillance databases . . . which are a growing trend because they are technology-driven," she said.

The association had argued that such computer databases were unconstitutional. But the appeal court didn't have to consider the constitutional issue because the bylaw was struck down on administrative grounds, Vonn said.

"We don't feel this is a tremendous impediment to police investigators," she added, pointing out police will still be able to gain access, by obtaining a search warrant, to the information recorded by pawnshops and second-hand stores when an item is suspected of being stolen.

The key issue, Vonn said, is that it will now be about a specific item suspected of being stolen, rather than police automatically receiving personal information about buyers and sellers of second-hand items.

nhall@png.canwest.com