Case Report – Federal Court dismisses application, articulates what damages are compensable under PIPEDA

19 Nov

On November 12th, the Federal Court dismissed a PIPEDA application for damages for a loss of employment that arguably flowed from a wrongful disclosure.

The applicant sold the respondent scrap metal for his employer. He began to sell scrap metal to the respondent on the side and apparently sold some of his employer’s scrap metal to his own credit. The employer spoke with the respondent after it noticed a decline in sales. The respondent disclosed the fact that the applicant had opened a supplier’s account in his own name and provided the employer with the applicant’s account statements. The employer terminated the applicant, who filed and then withdrew a wrongful dismissal suit in favour of a PIPEDA application targeted at the respondent.

The Court held that the respondent breached PIPEDA by disclosing the applicant’s personal information without consent. Notably, it suggested that information about the improper sales of the employer’s own scrap metal was “about the employer’s money” and not the applicant’s personal information. This reasoning did not justify the whole of the disclosure, however, as the applicant apparently sourced some of his scrap from means other than his employer.

Despite finding a breach, the Court dismissed the application because the applicant had proven no compensable damages. While acknowledging that the applicant might not have been terminated had the wrongful disclosure not been made, it held that PIPEDA only grants a right to damages intrinsic to the breach of privacy. It explained:

The Court must examine the real nature of the remedy claimed. Such claims as humiliation, loss of community support, diminution of standings and loss of income flowing therefrom (to name but a few) caused by breach of the Act fall within the statutory cause of action created by the Act. Claims for loss of income and similar loss due to termination of employment not caused by breach of the Act, do not.

The source of the Applicant’s complaint is the loss of his employment. He even claims for loss due to loss of a second job. But all of his loss claimed is tied directly to his termination for cause. While the termination might not have occurred if there had not been disclosure, the nexus to the claimed loss is termination of employment for which Stevens had, but gave up, the right to claim was unlawful.

Stevens v. SNF Maritime Metal Inc., 2010 FC 1137.

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