Legal Blog

Sheriff’s Sale – Mortgage Discharge Statement

Royal Bank of Canada v. Trang 2016 SCC

RBC had a $30K judgment against husband and wife. The debtors owned their own property subject to a mortgage in favour of bank of Nova Scotia that they kept in good standing. The debtors failed to show up to 2 judgment debtor examinations, BNS would not issue a mortgage statement without the debtors’ consent or a court order, the sheriff would not conduct a sheriff’s sale without the mortgage statement, and RBC was stalled. It brought an application against BNS and lost because of the Court of Appeal decision in Citibank v. Pleasance. It appealed the decision to the Court of Appeal and lost by a 2-1 decision. The Supreme Court of Canada recognised the business realities and overturned. The Court expressly overruled Citibank. It held that (i) the debtors impliedly had given BNS consent to provide the mortgage statement and therefore BNS had the right to provide it without running afoul of privacy legislation; and (ii) if a mortgagee does not voluntarily provide a mortgage statement, then a court should order the mortgagee to provide the statement if the creditor either requested the debtors to give consent to the release of a mortgage statement or the creditor scheduled one failed judgment debtor examination.

Written by Jonathan Speigel Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.