Canada: Court Finds Language Of Privacy Act Precludes Arbitration Of Privacy Disputes

Last Updated: July 29 2019
Article by Chloe A. Snider

Overview

There have been a number of recent decisions in the arbitration space regarding when it is appropriate to stay litigation in favour of arbitration and where it is not. In particular, recent appellate case law (e.g., Wellman, and Heller) discusses and interprets the principle set out in Seidel v. TELUS Communications Inc., 2011 SCC 15 that arbitration clauses will generally be enforced "absent legislative language to the contrary."

In particular, these cases address whether statutory language in consumer protection and employment legislation constitutes "legislative language to the contrary" that precludes parties from agreeing to arbitrate. However, there was no case law that considered this issue in the context of the various privacy statutes that exist across Canada – until now.

In Butt v. Kiewit Energy Corporation, 2019 NLSC 119 the Supreme Court of Newfoundland and Labrador (the "Court") considered among other things whether provisions of the Privacy Act (Newfoundland) included language that precluded the arbitration of privacy rights set out in that statute. The Court found that it did.

In particular, the Court held that under sections 7-9 of the Privacy Act, it has exclusive jurisdiction over claims for the statutory privacy breaches (as opposed to the common law privacy rights) and that to the extent an arbitration clause "purport(s) to take away a right, benefit, or protection confirmed by the Privacy Act, it is invalid". This has implications for those seeking to arbitrate privacy disputes, particularly where consumer protection laws do not already apply to preclude arbitration.

Background

The representative plaintiffs commenced a proposed class proceeding against their former employer alleging breach of privacy (and other causes of action) resulting from the theft of one of the defendant's computers on which the plaintiffs' personal employment information was allegedly stored.

The defendant sought to stay the action pursuant to section 97(1) of the Judicature Act (Newfoundland), on the basis that the court lacked jurisdiction as a result of the arbitration clause in in the collective agreement between the defendant and the members of the proposed class. In this case, the arbitration clause reflected the provisions of the Labour Relations Act (Newfoundland), which required arbitration to resolve certain disputes. However, the proposed class would consist of former, not current employees, a fact that was central to the Court's decision.

The Decision

The issue to be decided was whether the plaintiffs could pursue their claims before the Court or whether they were required to have the claims determined by arbitration under the collective agreement. In order to decide this issue, the Court analyzed (1) the nature of the dispute; and (2) the scope of the collective agreement.

With respect to issue (1), the nature of the dispute, the Court characterized the dispute as being one concerning "the mishandling of the Plaintiffs' personal information post-employment".

Importantly, it arose from the employment relationship, because it was in this context that the defendant had obtained the information in question.

However, under issue (2), the Court had to determine whether the collective agreement, and in particular the arbitration clause contained in the collective agreement, applied to the dispute, as characterized by the Court, and whether there was any statutory language that would oust the ability of the parties to arbitrate the underlying privacy dispute.

While the Court held that the dispute over whether the defendant owed a duty to safeguard the personal information in issue fell within the ambit of the relevant provisions of the Labour Relations Act, the real issue was whether the duty to do so post-employment fell within the ambit of the act and the associated arbitration clause. The court held that this issue – about post-employment duties – did not fall within the scope of the arbitration provision or the relevant provisions of the labour relations legislation.

Although it was perhaps not necessary to do so in light of its decision about the scope of the arbitration clause, the Court also held that it had exclusive jurisdiction over the plaintiffs' claims for the alleged breach of the Privacy Act. In that regard, the plaintiffs relied on section 8 of the Privacy Act, which provides: "An action for violation of privacy shall be heard and determined by the Trial Division". Section 9 provides: "This Act applies where there is a violation of the privacy of an individual" and that where "there is a conflict between this Act and another Act... this Act prevails."

The question for the Court was whether these provisions provide "clear legislative language" that arbitration was not available in the circumstances. According to the Court, the Privacy Act did contain clear legislative language: the legislature chose to have all actions for the statutory breach of privacy heard and determined by the Trial Division (section 8) and chose to give the Privacy Act paramountcy over another act if there was conflict (section 9). Accordingly, the legislature's choice for the forum of such disputes was clear. However, the Court stated that the pursuit of remedies for breach of privacy under the common law tort of intrusion upon seclusion were distinct.

Takeaways

  • While ultimately the Court concluded that the remaining claims for breach of contract, warranty, fiduciary duty and confidence, negligence and intrusion upon seclusion did not fall within the mandatory arbitration provision of the underlying contract and labour legislation, this decision is important from a privacy and arbitration perspective for those seeking to arbitrate privacy disputes:
  • The decision suggests that in Newfoundland and perhaps other provinces that have similar privacy legislation, it may not be possible to arbitrate dispute relating to breaches of the relevant privacy statute. This might already be the case where the claimants are consumers (as a result of consumer protection legislation), but will be more impactful in cases that do not deal with consumers, such as this case.
  • The impact of this decision will vary as between provinces. For example, Ontario does not have comparable privacy legislation. This is important given that the Court distinguished between the statutory and common law privacy breaches.
  • This decision in not surprising in light of existing commentary on privacy rights in Canada, which suggests that they are quasi-constitution (see Douez).
  • The issue of when statutory language will preclude parties from agreeing to arbitrate is currently a hot topic and will likely be decided (again) by the Supreme Court of Canada in Heller. This leaves some uncertainty as to when arbitration clauses will be enforceable, and emphasizes the importance of seeking legal counsel with respect to the enforceability of arbitration clauses.

About Dentons

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Specific Questions relating to this article should be addressed directly to the author.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions