Law Times

Law Times • January 23, 2017 Page 11 www.lawtimesnews.com Ruling 'sets out the fence posts' of federal statute BY SHANNON KARI For Law Times A Supreme Court of Can- ada decision shows that federal privacy provi- sions will not always be a bar to some sensitive informa- tion being disclosed, depending on the factual circumstances. The ruling in Royal Bank of Canada v. Trang is also one of only a handful of times the country's highest court has been asked to interpret the Per- sonal Information Protection and Electronic Information Act since it became law in 2000. Where there is a range of opin- ion, though, is whether the Su- preme Court's analysis in Trang will have a broader application and potentially impact other areas such as the "Do Not Call" and "anti-spam" regulations that currently apply to businesses. Kirsten Thompson, a part- ner at McCarthy Tétrault LLP in Toronto, says the decision "sets out the fence posts" of what will be permissible in terms of dis- closure of private information under the federal statute on the basis of implied consent. "You can't just shelter behind PIPEDA," says Thompson, who heads the firm's cybersecur- ity, privacy and data protection group. The Office of the Privacy Commissioner of Canada was appointed as amicus curiae in the hearing since the Trangs did not participate in the litigation. Patricia Kosseim, its senior general counsel and director general, agrees with Thompson that the decision provides guid- ance on how to approach issues such as whether there has been implied consent. "The most helpful thing in this decision is the analytical framework," says Kosseim. The path that ended up at the Supreme Court began in 2008 when the Royal Bank lent $35,000 to the Trangs. They defaulted on the loan and in 2010 the bank obtained a judgment against the couple. RBC filed a writ of seizure and sale with the sheriff in Toronto. The sheriff, however, refused to sell the property without ob- taining a mortgage discharge statement from Scotiabank. It re- fused to provide the statement on the basis that it was not permitted to do so under PIPEDA, without the approval of the Trangs. RBC was unsuccessful in Ontario Superior Court and the Court of Appeal in motions to compel Scotiabank to produce the mortgage discharge state- ment. Scotiabank was a named respondent, but it did not par- ticipate in the litigation. The Ontario Court of Ap- peal, in a 3-2 decision, concluded that a mortgage discharge state- ment is "personal information" for the purposes of the federal privacy legislation. As well, it found that the Trangs did not provide an im- plied consent to the information being disclosed. The majority decision suggested that RBC could have obtained consent with a term in its original loan agreement or through a specific rule of Civil Procedure (60.18(6) (a)) to examine a representative of Scotiabank. The Supreme Court, in its ruling, sided with the dissenting decision in the Court of Appeal that was issued by Justice Alex- andra Hoy. She stated that someone tak- ing out a mortgage would rea- sonably expect the mortgagee was entitled to provide a mort- gage discharge statement based on the facts of this case. PIPEDA governs the collec- tion and disclosure of personal information by organizations in the course of commercial activ- ities. The Supreme Court deci- sion, written by Justice Suzanne Côté, referred to a published guide about the provisions that refer to them as consumer pro- tection legislation for the digital economy. "PIPEDA does not set out a blanket prohibition on disclo- sure without knowledge and consent," wrote Côté. She stated that financial infor- mation is generally private, but whether there has been implied consent to its disclosure depends on the factual circumstances. Mortgage principal, rate of interest, payment periods and the due date are already publicly available through land registra- tion searches. "I find that the information at issue is less sensitive than other fi- nancial information," wrote Côté. "Here, RBC is seeking disclo- sure regarding the very asset it is entitled to, and intends to, realize on. It would be unreasonable for a borrower to expect that as long as he refused to comply with his obligation to provide informa- tion, his creditor would never be able to recover the debt." Martin Sclisizzi, a partner at Borden Ladner Gervais LLP in Toronto, says the Supreme Court was correct in not reading too much into the privacy legislation. "A creditor is entitled to en- force without too many hoops to have to jump through. For debt- ors, you can run, but you cannot hide," says Sclisizzi, a commer- cial litigator who has acted for clients on privacy-related issues. The Supreme Court stressed that RBC was exercising its le- gal rights and that a financial institution should not disclose a mortgage discharge statement to an entity without a legal interest in the property. The privacy commissioner argued at the Supreme Court that there was not implied con- sent to release the mortgage in- formation. However, the ruling makes it clear that each case will turn on its facts, says Kosseim. "This is a highly context- sensitive analysis," she says. The ruling "gives us consid- erations to help infer the sensi- tivity of the information" in fu- ture cases, she adds. Thompson agrees that whether to disclose certain information will always be a balancing act. LT FOCUS Patricia Kosseim says the decision in Royal Bank of Canada v. Trang provides guidance on how to approach issues such as whether there has been implied consent. This is more than a phone book. 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