RBC v. Trang: When Is 'Highly Sensitive' Financial Information Not That Sensitive?

The Supreme Court of Canada has provided guidance to financial institutions holding otherwise "highly sensitive" information to determine when that information is somewhat less sensitive, such that it can be disclosed. The short answer, as provided in detail in the recent decision of Royal Bank of Canada v. Trang, 2016 SCC 50 (CanLII), is that it depends on the context of the disclosure request.

History of the case

Royal Bank of Canada (RBC) was a judgment creditor of debtors who had defaulted on a loan. In its enforcement of its judgment against the debtors, RBC needed to obtain a mortgage discharge statement from The Bank of Nova Scotia (Scotiabank), because Scotiabank was the mortgagee of the debtors' home. A mortgage discharge statement shows the current balance of a mortgage. RBC needed the mortgage discharge statement in order to obtain a sheriff's sale of the debtors' home, so that RBC could satisfy its judgment. The debtors refused to consent to the production of the document. Scotiabank would not produce it to RBC without the debtors' consent. The debtors' refusal was on the grounds that the Personal Information Protection and Electronic Documents Act (PIPEDA) precluded the production of the document. RBC lost in motions court, lost at the Ontario Court of Appeal, but won at the Supreme Court of Canada. Notably, the debtors and Scotiabank did not respond to the Supreme Court of Canada appeal.

Supreme Court's decision

There are two important aspects of the Supreme Court's decision.

The first is that it agreed with RBC on the availability of section 7(3)(c) of PIPEDA. As a brief aside for context, the purpose of PIPEDA is to regulate the "collection, use and disclosure" of personal information obtained by organizations during the course of "commercial activity". Generally, an organization cannot disclose someone's personal information without their knowledge and consent. A number of exceptions apply. One of these exceptions is section 7(3)(c), which requires disclosure of personal information to comply with a court order. RBC sought such an order, but was denied at every level of the courts, until it reached the Supreme Court of Canada.

The Supreme Court held that a court order requiring disclosure of personal information in the creditor/debtor context is available either where:

(1) the debtor does not comply with a written request that they sign a form consenting to the disclosure of the information sought, or

(2) the debtor fails...