Case Report – Court rejects complaint about intelligence gathering through corporate e-mail system

18 Mar

On February 18th, the Federal Court dismissed a PIPEDA application that alleged an executive had unlawfully collected personal information by sending an e-mail to members of his firm to inquire about the applicant.

The facts leading to the application are twisted. Martha McCarthy, a prominent family law lawyer in Ontario, had represented the applicant’s wife in a contentious family law dispute. The judgement reports that Ms. McCarthy told her brother, Peter McCarthy, that she had received two threatening phone calls from the applicant. Mr. McCarthy, a Vice-President at J.J. Barnicke, e-mailed the company’s sales force for information. His subject line stated “Mark Waxer” and his e-mail stated, “Does anyone know what firm Mark is with?” Mr. Waxer complained to the federal Privacy Commissioner and subsequently filed his application.

These facts raise a good issue about PIPEDA application, but the Privacy Commissioner took jurisdiction over the complaint and the court application did not address whether the collection at issue was made in the course of J.J. Barnicke’s commercial activity or for Mr. McCarthy’s personal purposes. (Query whether a finding of jurisdiction is consistent with the Federal Court’s recent Johnson v. Bell Canada ruling.)

The Court dismissed the unlawful collection complaint because the applicant had not proven that Mr. McCarthy had actually collected personal information as result of his request. Notably, the Court gave no weight to the applicant’s argument that it should infer that Mr. McCarthy’s inquiry was fruitful from the respondent’s failure to adduce evidence of a thorough search of its computer system (including a search of e-mail archives and back-up tapes). It was satisfied with Mr. McCarthy’s sworn denial, which the applicant did not challenge in cross-examination .

The Court also declined to award damages for breach of PIPEDA’s accountability principle. The Privacy Commissioner had concluded that J.J. Barnicke did not have appropriate privacy policies in place nor did it have a designated privacy officer accountable for compliance as required by the Principles 4.1 and 4.1.4 of Schedule 1 to PIPEDA. The company complied with the Commissioner’s recommendations, and she therefore deemed the complaint to be “well-founded and resolved.” Without re-visiting the question of breach, the Court held that it was not proper to award damages in the circumstances. It held the applicant could not claim damages for the stress of the proceedings themselves and held that the he had not otherwise proven any other humiliation or embarrassment that would warrant a damages award. It noted that the applicant’s aggressive and assertive position throughout the litigation was inconsistent with his damages claim.

Waxer v. J.J. Barnicke Limited, 2009 FC 168 (CanLII).

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