RBC v. Trang - Ontario Court of Appeal Examines Disclosure of Mortgage Discharge Statements without Consent under PIPEDA

**Please note that this decision has been overturned by the Supreme Court of Canada. My blog post on the SCC decision is here**

This week the Ontario Court of Appeal released a decision that examined when mortgage statements can be released without  the express consent of a mortgagor under the Personal Information Protection and Electronic Documents Act ("PIPEDA"). The answer? Basically, only by court order and only after the party seeking the release has exhausted all other remedies.

RBC had a judgment against the Trangs  who owned a property which 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. RBC appealed.

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: It could still seek to obtain the mortgage discharge statement by a motion under Rule 60.18(6)(a) of the Rules of Civil Procedure . Rule 60.18(6)(a) states: "Where any difficulty arises concerning the enforcement of an order, the court may, (a) make an order for the examination of any person who the court is satisfied may have knowledge of the matters. . .". Here RBC could show "difficulty" in enforcing its judgment, both because the Trangs failed to appear for two judgment debtor examinations and because Scotiabank would not produce the discharge statement. The Court held that under Rules 34.10(2)(b) and (3) (the rules requiring a person being examined to produce all non-privileged documents), Scotiabank would be required to bring to the examination and produce the discharge statement. An order made under Rules 60.18(6)(a) and 34.10 would permit Scotiabank to disclose the mortgage discharge statement to RBC without the Trangs' consent. 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.:
"The Statement constitutes 'less sensitive' information for the purposes of s.4.3.6 of Schedule 1 to PIPEDA, and disclosure accords with the reasonable expectations of an individual in the Trang's position. Had this court in Citi Cards considered s.4.3.6, it would have - or at least should have - come to a different result." (para.93).

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)

The full decision is an interesting read and can be found here: RBC v. Trang 2014 ONCA 883

UPDATE: Please note that on July 16, 2015 the Supreme Court of Canada granted leave to appeal from this decision. See RBC v. Trang 2015 CanLII 43097 (SCC)