Supreme Court Releases Important Decision on PIPEDA and Disclosure of Discharge Statements: RBC v. Trang
The Supreme Court of Canada recently released a significant banking decision dealing with personal financial information and its disclosure under Canada’s federal privacy law, the Personal Information Protection and Electronic Documents Act (PIPEDA). In overturning the Ontario Court of Appeal decision, the Supreme Court of Canada interpreted the legislation in a way to balance individual privacy concerns with creditors' needs to collect personal information to enforce their legal rights.
Facts & Background
The Royal Bank of Canada had a judgment against the Trangs who owned a property that they had mortgaged with Scotiabank. The Sheriff refused to sell the property without a mortgage discharge statement from Scotiabank. RBC tried to obtain this statement by examining the Trangs but they refused to attend for examination. Scotiabank also refused to release the statement arguing that PIPEDA precluded them from doing so. Scotiabank needed the Trangs' consent, which they did not have. RBC brought a motion for an order that Scotiabank produce the discharge statement. The motion judge dismissed the motion relying on the Court of Appeal's judgment of Citi Cards Canada Inc. v. Pleasance, 2011 ONCA 3 which had similar facts and held that none of the exceptions in PIPEDA regarding disclosure were available to RBC. RBC appealed.
Court of Appeal
In a 3-2 split decision, the Court of Appeal dismissed RBC's appeal, finding, among other things, that RBC had not (similar to Citi Cards) exhausted all of its options. RBC could have brought a motion under Rule 60.18(6)(a) of the Rules of Civil Procedure to have the court make an order for the examination of Scotiabank. Then, under Rules 34.10(2)(b) and (3) Scotiabank would be required to bring to the examination, and produce, the discharge statement. This would permit Scotiabank to disclose the mortgage discharge statement to RBC without the Trangs' consent and it would satisfy the exemption in s. 7(3)(c) of PIPEDA which authorizes an organization to disclose personal information without the individual's knowledge and consent if disclosure is required to comply with a court order or the rules of court relating to the production of records.
The dissenting judges (Justices Hoy and Sharpe) would have allowed RBC's appeal, finding that the mortgage discharge statement should be disclosed as the Trangs' consent to the disclosure of the discharge statement could be implied. Schedule 1, s.4.3.6 of PIPEDA notes that consent for the purposes of the statute can be implied when the information is “less sensitive”. Disclosure of this mortgage discharge statement accorded with reasonable expectations of an individual in the Trangs’ position. The dissent would not have required RBC to bring another motion:
Whether RBC purported to move under rule 60.18(6)(a) or simply asked the court for an order requiring the mortgagee to disclose the Statement is immaterial. In either case the relief sought is substantively identical. Requiring a further motion would not be just, and it certainly would not be expeditious.(para. 96)
Supreme Court of Canada
RBC appealed once again and was finally successful. Coté, J. writing on behalf of the Court, sided with the minority in the Court of Appeal decision.
First, PIPEDA does not diminish the powers of the court to make orders relating to the production of documents. The motion judge, and majority of the Court of Appeal, erroneously concluded that the order sought by RBC did not constitute an “order made by a court” under s. 7(3)(c) of PIPEDA. They did so by relying on Citi Cards which the Supreme Court of Canada expressly overruled in this case. The motion judge had the power under the Rules of Civil Procedure or the inherent jurisdiction of the court to order disclosure.
Secondly, the Trangs impliedly consented to disclosure in the circumstances of this case. The information at issue was less sensitive than other financial information. A reasonable mortgagor in the Trangs’ position would be aware that the financial details of their mortgage were publicly registered on title, and that default on the RBC debt could result in a judgment empowering the Sheriff to seize and sell the mortgaged property. A reasonable mortgagor would know that the outstanding mortgage balance would ultimately be provided to the Sheriff and that a judgment creditor has a legal right to obtain disclosure of the mortgage discharge statement.
Coté J. concluded that “consent for the purpose of assisting a sheriff in executing a writ of seizure and sale was implicitly given at the time the mortgage was given”. However, it is not reasonable to expect a bank to disclose a mortgage discharge statement to a person with no legal interest in the property.
Scotiabank was ordered to produce the mortgage discharge statement.
While PIPEDA plays an important role in protecting our privacy rights, the Supreme Court confirmed that these rights will be balanced with legitimate business concerns in trying to comply with the legislation in a practical way. This decision has considerable implications for third party lenders and creditors. However, it should be noted that the Supreme Court has only found implicit consent regarding this particular type of personal information (mortgage discharge statement) in this particular circumstance (seizure and sale proceedings). This case will provide guidance to other situations where it can be argued that “implied consent” has been provided. Sensitivity of the information, reasonable expectations of all involved, and the nature of the transaction must be considered.
 Royal Bank of Canada v. Trang, 2016 SCC 50
 S.C. 2000, c.5
I attend a lot of events for women lawyers hosted by a variety of law associations and organizations. It is important that we network, support, and learn from each other. I’ve noticed an underlying theme at some programs that makes me uncomfortable. There is an oft-repeated assumption that we, as women lawyers (particularly those of us who are mothers), have more obligations at home or outside the office (I will call them “life obligations”) than our male colleagues. I have heard: “Well, this is a woman’s event so I would be remiss to not speak about our extra challenges with home life”; “As women we have so many more responsibilities than our male partners”; or, “Of course we must talk about balancing our home obligations with work as women lawyers”.
So you might be thinking “Why does this bother you, it’s the truth, isn’t it?” Well it does bother me and here’s why:
First, is it true? Yes, I’ve seen the studies that say women are still doing more of the unpaid work in the home than men, even when both partners have full time jobs. I won’t argue with that. But, these studies are not saying that all women do more work at home than men. There are still a good number of women who are part of an equal partnership with respect to child rearing and household chores or who may even do less than their partner or spouse.
More importantly, if this assumption (that women lawyers have more life obligations) is true, should it be? Here’s what bothers me the most: it appears that there is a general acceptance that because we are women we will always have more life obligations than our male counterparts. This makes no sense to me. If we simply accept that these life obligations are, and always will be, a woman’s responsibility, how can we ever expect that to change? How do we ever expect to be truly equal in the legal profession when everyone assumes that we do more at home? There will never be gender equality in the workplace without gender equality at home. There will never be gender equality at home if we keep reinforcing the belief that women have more responsibilities outside the office.
Speaking from personal experience, after the birth of my first child I was more than ready and willing to get back to work after my maternity leave. I remember trying to join a sub-group in my practice area thinking it could help expand potential business development opportunities. However, I was told by a senior partner that perhaps joining this group was not a good idea at that time, after all, I had just had a kid and life was going to be busy enough. Perhaps this was said with the best of intentions, but this partner did not even consider the fact that I had a supportive husband, had hired a superb caregiver, and had dedicated time to focus on my career. All of this did not matter, as they simply assumed that as a mother I now had more life obligations which would detract from my work obligations. I doubt the same assumption was made of my fellow male associate who also just had a child with his wife. By placing this assumption front and center at women’s programs, it gives licence to others to make decisions for us under the guise of lessening the “burden” on women lawyers.
Also, some may feel that there is a shaming factor in place for women lawyers who choose not to take on extra life obligations. It’s almost as if they are not living up to the expectation of what they should be: the struggling woman lawyer trying to do it all.
On the flip side, think about how this false belief affects male lawyers or our male partners and spouses. If the message is that women are responsible for obligations at home or are better at life ‘stuff’, or that men are ill-equipped to manage a household the way a woman can, why would men ever step up and do more? Or for those men who do step up and are just as involved at home as their spouses or partners, it may be incorrectly assumed that they do not need (or want) to be home for dinner or bedtime because they have a spouse who will be.
We are never going to level the playing field for women in law by teaching women how to balance our life obligations with our work obligations. Law firms are going to level the playing field by allowing our male counterparts to take significant paternity or parental leave, supporting them when they take an active role in their home life, and encouraging them to be comfortable with these choices. Women do not have a monopoly on life obligations.
I know some may not agree with me and I would love to hear your opinions. I also know I am writing this through a very specific and privileged lens. However, I just cannot go to another event aimed at keeping women in the legal profession and have it start with this (false) premise. Instead of helping us, I believe it is hurting us even more.
Erin C. Cowling is a freelance litigator, researcher & writer at Cowling Legal Freelance and President and Founder of Flex Legal Network Inc., a network of freelance lawyers.