Party complains about receiving confidential information of non-parties. What next?

On January 24th, the Ontario Superior Court of Justice held that a plaintiff did not breach the deemed undertaking rule by complaining to a professional body (the Institute of Chartered Accountants of Ontario) that the defendants had produced documents containing their former clients’ confidential information.

Though the Court doubted that the plaintiff’s motives were pure, it held that he did not breach the deemed undertaking rule because his use of the production was done with the affected clients’ consent. The Court stressed that it was not deciding whether the defendants’ production was proper, but also said that a privacy-related complaint about producing documents pursuant to the Rules is “remarkable on its face.”

Two questions: (1) Is the deemed undertaking finding consistent with case law that recognizes that the undertaking gives rise to a duty owed to the court for the benefit of the parties?(2) Were the clients’ identities relevant, or could identifying information have been redacted without causing an improper production?

Martenfeld v Collins Barrow Toronto LLP, 2010 ONSC 598.

The Pitfalls of Accessing Private Emails

Here’s a link to a Law Times article, reviewing an interesting decision recently released by the B.C. Supreme Court, which awarded damages for improper publication of the plaintiff’s personal emails.  The parties were former spouses who were already engaged in extensive family law litigation — which sets the unfortunate and messy backdrop for the privacy-related litigation.  The defendant husband published a number of defamatory comments about his ex-wife, by way of emails and internet postings.  He included references to private email exchanges of his former spouse, and which he discovered on an old home computer.

The Court concluded that the defendant had “taken his battle with [his ex-wife] over custody and access far outside the ordinary confines of the family court litigation.”  In addition to defaming his ex-wife, the defendant was found to have breached her privacy by publishing the contents of her private emails.  As a result, he was ordered to pay damages of $40,000 for breach of privacy and defamation.

The breach of privacy aspect of the decision flows from B.C.’s Privacy Act, which creates an express statutory recourse for privacy violations.  Other jurisdictions, including Ontario, have not adopted such statutory causes of action for violation of privacy, so courts in those jurisdictions would not necessarily arrive at the same result.  However, some cases have suggested that there may be a common law tort for invasion of privacy, which could form the basis for similar claims.

The decision provides a reminder of the need to be prudent in accessing – and certainly in publishing – emails in respect of which there is a right or an expectation of privacy.

Also a good reminder of the wisdom of avoiding family law litigation!

Court of Appeal considers privacy expectation of regulated businesses

In R v. Clothier, 2011 ONCA 27, the Court of Appeal for Ontario held that the “entrapment” defence did not apply to the regulatory offence of a store clerk selling cigarettes to a minor in violation of the Smoke Free Ontario Act.  The minor was a “test shopper” for the local tobacco enforcement agency.  The clerk argued that this was entrapment.  The Court held that entrapment did not apply and that government authorities can use random test shopping to monitor compliance with the Act.  Of interest from a privacy point of view is the Court’s statement that regulated businesses should expect monitoring as a consequence of doing business:

First, these stores operate in a regulated commercial environment, and operating in this regulatory environment comes with consequences.  As Cory J. said in Wholesale Travel, at p. 229: “… those who choose to participate in regulated activities have, in doing so, placed themselves in a responsible relationship to the public generally and must accept the consequences of that responsibility.”

Stores selling tobacco and their employees have this responsibility to the public.  One important consequence of this responsibility is their deemed acceptance of an undertaking to exercise reasonable care to ensure that the harm identified in the regulatory statute – here selling tobacco to minors – does not occur.  This entails a further
consequence.

Those who sell tobacco products must accept a greatly diminished expectation of privacy, as some form of monitoring will be necessary to ensure that they meet their due diligence responsibilities. The monitoring is done, not to punish past conduct, as would be the case for an offence under the criminal law, but to deter harmful conduct in the future – in other words, to prevent harm to the public from the illegal sale of tobacco to
minors.

We recognize entrapment as a defence in criminal law because of our concern that random virtue testing will result in too great an invasion of personal privacy. That rationale simply does not apply in this regulatory context.

This is an interesting analysis in that it refers both to a diminished “expectation” of privacy and a diminished concern with the “invasion” of privacy in a particular context.

Banks prohibited by PIPEDA from disclosing mortgage discharge statement

In an interesting decision released today, the Ontario Court of Appeal held in Citi Cards Canada Inc. v. Pleasance, 2011 ONCA 3, that PIPEDA prohibits banks from disclosing mortgage discharge statements to a third party.

Citi had a credit card debt against Pleasance and sought to enforce judgment through a sheriff’s sale of Pleasance’s home.  But the sheriff would not act without mortgage discharge statements, which the banks refused to provide on the basis that disclosure would be in breach of privacy rights under PIPEDA.  The Court called this a “knotty and interesting question”, but upheld the lower court decision prohibiting disclosure.  The Court held that mortgage discharge statements contain “personal information” which is not publicly available, that Citi’s interests (as a third party) are not factored in the balancing of interests under PIPEDA, and that Citi could have pursued alternate remedies through a judgment debtor exam or order in aid of execution.

A link to the decision is here.