Mortgage Broker

CMB MAGAZINE cmba-achc.ca winter 2017 | 39 circumstances described above. RBC wanted the sheriff to seize and sell property owned by the debtor in order to satisfy the judgment. However, in Ontario, before seizing property, the sheriff is to satisfy himself or herself that there is equity in the property available to be applied toward the judgment. is means (at least in Ontario) that a judgment cannot be enforced by seizing and selling property without first obtaining discharge statements from prior charge holders. Even to the degree that this might not be a legal requirement in other provinces, it is necessarily a practical consideration. In this case, the lender – Scotiabank – refused to produce the discharge statement without the consent of the judgment debtor, who would not consent. PIPEDA governs the collection, use and disclosure of personal information by organizations in the course of commercial activities. It is intended to recognize both the right of privacy of individuals and the need of organizations to collect, use or disclose personal information for purposes that a reasonable person would consider appropriate under the circumstances. In general, PIPEDA prohibits organizations from disclosing "personal information" (a discharge statement does contain such information) without the knowledge and consent of the affected individual. ere are a number of exceptions to the prohibition, including where disclosure is: n for the purpose of collecting a debt owed by the individual to the organization, n required to comply with an order made by a court, or n required by law. e Court found that the second of the above three bullet points applied in this case; it did not consider the other two. How these exceptions might require a lender to provide a discharge statement is technical enough that a mortgage broker would want to hire a lawyer to pursue the matter. Fortunately, the mortgage broker also has available the possibility that the debtor implicitly consented to the release of the discharge statement. Note that if one of the exceptions applies, the lender can be required to provide the discharge statement; however, if there is implied consent, the lender is permitted – but not required – to provide the discharge statement. Implied consent exists when consent has not been given expressly but is inferred from the circumstances. e more sensitive the personal information, the less likely a court would find that there was implied consent to disclose the information. Financial information is generally considered extremely sensitive; however, the sensitivity of specific financial information must be assessed by looking at the context in which it exists, including: n by considering related financial information already in the public domain, n the purpose served by making the related information public, and n the nature of the relationship between the parties and affected third parties relying on the information. e current balance of a mortgage is not sensitive financial information within the context of providing it to a judgment creditor. Much of the information it contains is available from public registries (including the principal amount of the mortgage, the rate of interest, the payment periods and the due date). e related information is available at the land registry – in part, to allow creditors with a current or future interest in the land to make informed decisions. A discharge statement is a snapshot at a specific point in the life of a publicly disclosed mortgage. Disclosure gives certainty to the rough calculations that could already be made from the publicly available information. A person seeking the information to exercise an established legal right is clearly different from disclosure to a person who is merely curious or seeks the information for nefarious purposes. e state of account between the borrower and lender affects more than just the relationship between them – it also affects other creditors. A mortgage discharge statement is not something that is merely a private matter between the borrower and lender, but rather is something dependent upon the rights of others and, accordingly, is something they have a right to know. A reasonable person would expect the information to be disclosed to a judgment creditor. It would be unreasonable for a borrower to expect that as long as he or she did not provide the information, his or her creditor would not be able to recover the debt. Based on the facts of the case before it, the Court said that the debtor implicitly consented (at the time the mortgage was given) to the discharge statement being disclosed for the purpose of assisting a sheriff in executing a writ of seizure and sale. As a result, Scotiabank was permitted to disclose the mortgage discharge statement to RBC. The Takeaways A lender is, in most cases, permitted to provide a discharge statement to a judgment creditor. If the lender does not provide the statement, it is likely possible to obtain a court order requiring him or her to do so. IMPLIED CONSENT EXISTS when consent has not been given expressly but is inferred from the circumstances. The more sensitive the personal information, the less likely a court would find that there was implied consent to disclose the information.

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