Ontario Court Of Appeal Recognizes New Privacy Tort - Privacy

Originally published in Blakes Bulletin on Privacy, Litigation & Dispute Resolution, February 2012

In a landmark decision, the Ontario Court of Appeal has recognized the existence of a tort of invasion of privacy in a decision released January 18, 2012. In Jones v. Tsige, the court confirmed that a type of invasion of privacy known technically as "intrusion upon seclusion" is a valid cause of action in Ontario, and granted summary judgment in favour of the plaintiff, whose privacy had been invaded by the actions of the defendant.

The implications of the development of a privacy tort on class actions will also be an important issue as the law develops. Previously, the fact that federal Canadian privacy law requires a complaint to the Privacy Commissioner before any application for damages, and requires that such an application be brought in Federal Court (as opposed to provincial courts) had limited the availability of class actions. With the court's decision, plaintiffs' counsel are likely to bring more privacy class actions.

Facts and judicial history

Both parties in this case were employees at a Canadian bank. Although they had never met, the defendant (Tsige) was involved in a relationship with the plaintiff's (Jones) former spouse. It was not disputed that the defendant had improperly accessed the plaintiff's personal banking records at least 174 times over a period of four years, contrary to bank policy. The defendant claimed that she was involved in a financial dispute with the plaintiff's former husband and accessed the accounts to confirm whether he was paying child support to the plaintiff, but she did not publish, distribute or record the plaintiff's banking information. The plaintiff commenced an action against the defendant, alleging (among other things) invasion of privacy.

The parties each brought competing motions seeking summary judgment. The motion judge dismissed the plaintiff's claim on the basis that Ontario law did not recognize a tort of breach of privacy. The plaintiff appealed to the Court of Appeal.

New tort

Justice Sharpe, writing for a unanimous Court of Appeal, reviewed case law in Ontario and concluded that the courts have remained open to the possibility of there being a common law tort of invasion of privacy, although it had never previously been recognized by an appellate court.

The court also noted that causes of action relating to privacy have been recognized in other jurisdictions (including the United States, the United Kingdom, Australia, and New Zealand), and that four Canadian provinces have already enacted legislation creating statutory causes of action for invasion of privacy.

In addition to these trends, the Court of Appeal cited three additional rationales supporting a tort of intrusion upon seclusion. Firstly, the courts have long recognized that a right to privacy underlies certain rights under the Canadian Charter of Rights and Freedoms (including the right to be free from unreasonable searches), and further that the common law should be developed in a manner consistent with the Charter. Secondly, technological advancements have led to the routine collection and electronic storage of vast amounts of highly personal information, posing a novel threat to the privacy of individuals. Finally, absent recognition of a new cause of action, the plaintiff would be left without an effective legal remedy since a remedy under the Personal Information Protection and Electronic Documents Act (PIPEDA) would be restricted to a complaint against the bank. Interestingly, Justice Sharpe stated that as the remedies under PIPEDA do not include damages, it would be difficult to see what the plaintiff may gain from such a complaint. Since PIPEDA does allow for an application to the Federal Court for damages, but only after the Privacy Commissioner has delivered a report after investigating a complaint, or has discontinued her investigation, Justice Sharpe may have been referring to the fact that, in this case, no damages would be available against the defendant (an individual who was not acting for a commercial purpose) under PIPEDA.

Against this background, the Court of Appeal confirmed the existence of a right of action for intrusion upon seclusion. This new tort has three elements:

that the defendant's conduct be intentional or reckless;
that the defendant must have invaded the plaintiff's private affairs or concerns without lawful justification; and
that a reasonable person would regard the invasion as highly offensive, causing distress, humiliation, or anguish.

It is not necessary for the plaintiff to prove any harm to his or her economic interests. It is also not necessary that the plaintiff's personal information have been published or disseminated by the defendant. The tort focuses on the act of intrusion upon the plaintiff's private affairs, not any subsequent use of the information.

The court was careful to emphasize, however, that only "deliberate and significant invasions of personal privacy", which would be viewed as offensive on an objective standard, will ground a cause of action. Accordingly, the court suggested that only intrusion into highly personal matters, for example, a person's financial or health records, sexual practices and orientation, employment, diary, or private correspondence, will meet the standard. Future cases will likely provide clarity as to the types of conduct that will meet this threshold.

Damages for intrusion upon seclusion

Since claims for invasion of privacy will usually involve intangible interests such as humiliation or emotional distress as opposed to pecuniary losses, damages for intrusion upon seclusion will generally be modest. The Court of Appeal imposed a cap of C$20,000 where the plaintiff has suffered no pecuniary loss. While not precluding punitive or aggravated damages awards on top of this amount in "truly exceptional" cases, the court was clear that it would not encourage them.

The factors identified for determining the quantum of damages are:

the nature, incidence, and occasion of the defendant's wrongful act;
the effect of the wrong on the plaintiff's health, welfare, social, business, or financial position;
any relationship, whether domestic or otherwise, between the parties;
any distress, annoyance, or embarrassment suffered by the plaintiff arising from the wrong; and
the conduct of the parties, both before and after the wrong, including any apology or offer of amends made by the defendant.

Result

The Court of Appeal found that the defendant had committed the tort of intrusion upon seclusion, and granted summary judgment in favour of the plaintiff. Damages were fixed at C$10,000, having regard to the factors set out above. The court noted the deliberate and repeated nature of the defendant's actions, the background of domestic relationships, and the plaintiff's distress at the invasion of her privacy. On the other hand, it noted that the plaintiff had not suffered any public embarrassment or harm to her health, welfare, social, business, or financial position, and that the defendant had apologized for her conduct and attempted to make amends. Despite the deliberate nature of the defendant's conduct, the court found that aggravated or punitive damages were not warranted.

Points of interest

Justice Sharpe noted that most American jurisdictions have recognized four categories of torts relating to invasion of privacy:

intrusion upon seclusion;
public disclosure of embarrassing private facts about the plaintiff;
publicity which places the plaintiff in a false light in the public eye; and
appropriation of the plaintiff's name or likeness.

In this case, the court was clear that it was recognizing only intrusion upon seclusion as a new cause of action, though it considered that appropriation of personality was already accepted in Ontario. However, it signalled that other torts relating to breach of privacy may be recognized in the future.

This decision has important implications for the media, which may investigate and report upon the private affairs of individuals. While it did not consider the issue in detail, the Court of Appeal recognized that in the future, it may be necessary to reconcile the new common law right to privacy with other competing rights, including the Charter rights of freedom of expression and freedom of the press. The court suggested that the balance may tip in favour of the press where it is reporting on matters that are in the public interest. Nevertheless, it can be expected that going forward, plaintiffs in defamation actions, particularly against media outlets, are likely to rely on this new cause of action, and may attempt to extend the law to recognize other privacy-related torts.

This decision may also have implications for organizations currently subject to PIPEDA and substantially similar privacy legislation. In the present instance, Justice Sharpe dispensed with the issue of the bank's liability by stating that the defendant acted as a rogue employee contrary to the bank's policy. However, if the defendant did not act as a rogue employee (i.e., if the defendant was acting on an organization's behalf, such as in the capacity of a private investigator), could the organization be liable for intrusion upon seclusion? It remains to be seen whether courts will be willing to award damages against an organization under the new tort when a damage remedy already exists under PIPEDA. If so, organizations may be subject to both a common law and a statutory duty to protect personal information that they collect, use or disclose in the course of commercial activities. In the case of a federal work, undertaking or business subject to PIPEDA, both duties may also extend to the protection of personal information about an employee of that organization.

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