The federal private sector privacy regime operates on a consent basis. Unless an exception is applicable consent is needed to collect, use or disclose personal information of another. That consent can be express or implied.
In Royal Bank of Canada v. Trang the Supreme Court of Canada took a practical and pragmatic approach to implied consent under the federal private sector privacy law, Personal Information Protection and Electronic Documents Act (PIPEDA).
The plaintiff, Royal Bank of Canada (RBC), loaned the Trangs about $35,000. The Trangs defaulted on the loan and RBC obtained a judgment against the Trangs. The Trangs own property in Toronto. Scotiabank holds the first mortgage on the property. In order to collect on its judgment, RBC filed a writ of seizure and sale with the sheriff in Toronto, which permits the sheriff to sell the Trangs’ property. The sheriff refused to sell the property without first obtaining a mortgage discharge statement from Scotiabank. RBC requested the mortgage discharge statement from Scotiabank. Scotiabank refused to provide the statement on the basis that PIPEDA precluded it from doing so without the Trangs’ consent.
RBC sought an order compelling Scotiabank to produce the mortgage discharge statement.
The motion judge denied RBC’s motion on the basis that the Ontario Court of Appeal’s decision in Citi Cards Canada Inc. v. Pleasance was binding, and prevented the Court from ordering Scotiabank to produce the mortgage discharge statement to RBC. The Citi Cards decision was one where the Ontario Court of Appeal held that a mortgage discharge statement was “personal information” for the purposes of PIPEDA and that none of the exceptions applied.
The majority of the Ontario Court of Appeal upheld the motion judge’s decision.
Supreme Court Decision
The Supreme Court of Canada assessed the exceptions under Section 7(3) of PIPEDA that permit disclosure without consent including for the purposes of collecting a debt, or to comply with an order of the Court, or as required by law. The Court noted that the intention behind s. 7(3) is to ensure that legally required disclosures are not affected by PIPEDA.
The Supreme Court of Canada reviewed and overruled the Citi Cards decision finding that the motion judge had the power to order the disclosure. The Court stated “[p]rovided the judgment creditor serves the debtor with the motion to obtain disclosure, the creditor should be entitled to an order for disclosure. A judgment creditor in such a situation should not be required to undergo a cumbersome and costly procedure to realize its debt. The foregoing is a sufficient basis to order Scotiabank to produce the statement to RBC, and I would so order.”
In addition, the Court also examined the consent of the Trangs. The Court noted that PIPEDA acknowledges that consent for the purposes of the statute can be implied consent when the information is “less sensitive”. The Court noted that this point had not been considered by the Citi Cards court.
The Court found that the mortgage discharge information was less sensitive than other financial information. Of note the Court looked at the entire context of the creditor relationship including the reasonable business interests of other creditors. The Court noted that when mortgages are registered electronically on title, the principal amount of the mortgage, the interest rate, the periods of payment and the due date are made publicly available. The Court noted that the state of the account between a mortgagor and mortgagee affects not just their relationship but also that of other creditors.
PIPEDA requires that the reasonable expectations of the individuals are relevant when obtaining consent and assessed the position of a reasonable mortgagor and found 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.”
The Court qualified the scope of the implied consent as applicable to only a party who has a legal interest in the property.
As a result, on this second basis, the Court found PIPEDA did not impede the requested disclosure.
The Court declined to assess whether the disclosure might also come within the “for the purpose of collecting a debt” exemption or the “required by law” exemption.
The result is a commercially practical result and does not permit privacy law to be used to frustrate other legal obligations that the individual has undertaken.
 2016 SCC 50
 S.C. 2000, c. 5
 2011 ONCA 3 (CanLII), 103 O.R. (3d) 241.
 s. 7(3), PIPEDA provides for disclosure without consent on a number of bases including in S. 7(3)(c) if the disclosure is “required to comply with … an order made by a court … with jurisdiction to compel the production of information, …”
 S. 7(3)(b), PIPEDA.
 S. 7(3)(c), PIPEDA, noted in footnote 4 above.
 S. 7(3)(i), PIPEDA.
 Schedule 1, cl. 4.3.6 of PIPEDA.
 S. 7(3)(b), PIPEDA.
 S. 7(3)(i), PIPEDA.