SCC says PIPEDA does not constrain a court’s procedural power

The Supreme Court of Canada decided the case of RBC v Trang this week. It held that the Personal Information Protection and Electronic Documents Act does not limit the procedural powers of a court. If a court, based on analysis that is not at all governed by PIPEDA, decides that an order to disclose personal information is warranted, it may issue the order. The order may be complied with notwithstanding PIPEDA.

Here is the ratio in Trang:

As a result of s. 7(3) , PIPEDA does not diminish the powers courts have to make orders, and does not interfere with rules of court relating to the production of records. In addition, PIPEDA does not interfere with disclosure that is for the purpose of collecting a debt owed by the individual to an organization, or disclosure that is required by law. In other words, the intention behind s. 7(3) is to ensure that legally required disclosures are not affected by PIPEDA.

All is right in the world again after the Ontario courts got quite twisted up on a very fundamental question about PIPEDA’s impact on the civil justice system.

The Court also held that debtors implicitly consent to the disclosure of mortgage status information (current balance) to judgement creditors who are seeking to recover a debt. This creates an opportunity for banks to assist judgement creditors without requiring them to obtain a court order. (Might the Court have had the burden of pro forma motions in mind?)

More generally, the Court supported a very flexible, fully-contextual implicit consent standard. This arguably erodes privacy protection and invites uncertainty, but also allows for just and sensible outcomes despite a consent rule in PIPEDA that is otherwise quite strict. Of course, this will feed the current dialogue about whether consent is a meaningful principle by which to govern the protection of personal privacy.

Royal Bank of Canada v. Trang, 2016 SCC 50 (CanLII).

Court approves settlement, limits recovery of class counsel fees

On August 29th, Justice Perell of the Ontario Superior Court of Justice approved settlement of an action brought against Home Depot following a significant 2014 payment card system intrusion. The Court approved a settlement that featured a $250,000 non-reversionary settlement fund for documented claims of “compromise” and an agreement to pay up to $250,000 in credit monitoring. It also denied payment of approximately $407,000 in (docketed) legal fees to class counsel as unjustified, approving instead, payment of $120,000 in fees.

This is a good outcome for organizations exposed to potential class action claims for data security incidents. It was driven by two factors: (1) the Court found the incident was associated with a limited risk of damage; and (2) the Court was impressed by Home Depot’s incident response.

Regarding damage, the Court assessed the risk of damage flowing from a compromise to payment card information and e-mail address information as minimal:

[46] Professor Archer outlined three heads of damage to consumers from a payment card breach:  (1) the risk of a fraudulent charge on one’s credit card; (2) the risk of identity theft; and (3) the inconvenience of checking one’s credit card statements. The so-called non-reversionary Settlement Fund of $250,000 is designed to provide compensation for these heads of damages.

[47] Of the three heads of damage, practically speaking, there is little risk of fraudulent charges because of sophisticated safeguards developed by credit card companies. Moreover, when there are frauds, the losses are almost always absorbed by the credit card company or the retailer. The credit card companies are not Class Members.

[48] In the immediate case, there is no evidence that a Class Member absorbed a fraudulent charge. Neither Merchant Law Group nor McPhadden Samac Tuovi LLP have been contacted by a putative Class Member who said that he or she suffered a financial loss attributable to the data breach.

[49] There is also little risk that the data breach, including the disclosure of email addresses, increased the risk of identity theft, because the stolen data would have been inadequate to allow a criminal to fake another’s identity.

[50] Mr. Hamel’s evidence was that for identity theft, the most important information to have is a government-issued identification number such as a driver’s licence number, social insurance number or passport number and preferably all three. In the immediate case, the data stolen from Home Depot did not include this information.

[51] As for inconvenience damages, in the immediate case, there are none, because credit card holders are already obliged to check their statements for fraudulent purchases.

(Note that the Office of the Information and Privacy Commissioner of Alberta has recognized that the loss of e-mail address is associated with a risk of spear phishing – a risk that is arguably remote.)

Regarding incident response, Home Depot had offered to pay for a number of fraud protection services following the incident – including credit monitoring, identity theft insurance and credit repair services. The Court commented that this reduced the need for behavior modification:

[100] The case for Home Depot being culpable was speculative at the outset and ultimately the case was proven to be very weak. The real villains in the piece were the computer hackers, who stole the data. After the data breach was discovered, there was no cover up, and Home Depot responded as a good corporate citizen to remedy the data breach. There is no reason to think that it needed or was deserving of behaviour modification. Home Depot’s voluntarily-offered package of benefits to its customers is superior to the package of benefits achieved in the class actions.

These two factors led the Court to place little value on the action or the settlement. Justice Perell (who is outspoken), commented, “I would have approved a discontinuance of Mr. Lozanski’s proposed class action with or without costs and without any benefits achieved by the putative Class Members.”

Lozanski v The Home Depot, Inc., 2016 ONSC 5447 (CanLII).

No privacy breach for reporting what’s on the court’s record

On August 10th, the Ontario Superior Court of Justice dismissed a privacy claim brought against the publishers of The Lawyer’s Weekly for reporting on the plaintiff’s involvement in a small claims court proceeding. The Court adopted the following defendant submission:

Further, recent developments in the common law regarding invasion of privacy have fallen well short of the cause of action asserted by Bresnark. On the facts of this case, there is no ‘intrusion upon seclusion’, nor even any disclosure of ‘private facts’. Indeed, the Article is wholly based on public court proceedings and the facts and findings disclosed on the record in those cases. Therefore, the cause of action asserted in paragraph 4 of the statement of claim should be struck as disclosing no cause of action. It is plain and obvious that it has no chance of success.

The Court also dismissed a defamation claim as statute-barred.

Bresnark v Thomson Reuters Canada Limited, 2016 ONSC 5105 (CanLII).

BCSC orders voyeur to pay $85,000 in privacy damages

On May 3rd, the Supreme Court of British Columbia ordered $85,000 in damages to be paid to a young woman whose stepfather surreptitiously recorded her while she was undressed in her bathroom and bedroom.

The damages finding was driven significantly by the “thoroughly undignified and humiliating actions” of the defendant, the age of the defendant and proof that the defendant’s actions caused a significant psychological disorder that the plaintiff was still recovering from at the time of trial (which was four years after discovering the defendant’s wrong). The plaintiff was recovering, the judge also noted, as well as noting that the defendant conducted his defence with “appropriate restraint.”

The judge did not consider evidence that the plaintiff was herself provocative in his damages assessment:

The evidence establishes that the plaintiff was a confident and happy young woman. She had a strong sense of self-esteem and probably was proud of her body. She was perfectly entitled to choose what she showed of her body — and to whom, how, and when.

The Court also ordered damages to be paid for past loss of earning capacity, the cost of medication taken and health care received and the cost of future care.

T.K.L. v. T.M.P., 2016 BCSC 789 (CanLII).

IPC comments on use and disclosure of OSR in litigation

On June 15th, the Information and Privacy/Commissioner Ontario dismissed a privacy complaint that alleged a school board breached the Education Act and MFIPPA by producing a student’s OSR in response to his human rights application.

The Board produced the OSR and filed it in a brief of documents to be used at a pending Human Rights Tribunal of Ontario hearing, all pursuant to the Tribunal’s rules. The complainant objected, and in a preliminary hearing, the HRTO directed the complainant to consent or face dismissal of his application. The complainant did not consent, his application was dismissed and he subsequently filed a privacy complaint with the IPC.

The IPC held that MFIPPA prevails over the statutory privilege provision in the Education Act and that the IPC is therefore “not bound to consider section 266 of the Education Act in its deliberations.” It also held that the OSR was information “otherwise available” to the Board and therefore open to its use under the provision of MFIPPA that stipulates that MFIPPA “does not impose any limitation on the information otherwise available by law to a party to litigation.”

The IPC did recommend that, going forward, the Board refrain from unilaterally handling the OSR when its potential use and disclosure is in dispute: “… the Board should make efforts to seek direction from an administrative tribunal or court prior to disclosing the information contained within an Ontario School Record during the course of litigation.”

 York Region District School Board (Re), 2016 CanLII 37587 (ON IPC).

 

BCSC dismisses privacy claim against lawyer

On July 26th, the Supreme Court of British Columbia dismissed a claim against a lawyer based in part on his service of application materials and based in part his conveyance of information about the plaintiff in a casual conversation with another lawyer.

The application that became the subject of the claim was made in an earlier family law proceeding. It was for production of financial documentation from the plaintiff relating to seven companies in which he had an interest.

The defendant represented the plaintiff’s wife. He served the companies with application materials (a notice plus affidavit) without redaction and in an unsealed envelope. Apparently his process server left the materials with two unrelated companies in an attempt to affect service.

The Court dismissed this claim because the lawyer was at all times acting as counsel in furtherance of his client’s interest and was protected by absolute privilege. Justice Griffin commented favorably on the lawyer’s conduct in any event, declining to give effect to the plaintiff’s argument about the need for redaction and sealed envelopes and giving wide berth to counsel’s judgement. She said:

As a matter of ethics, professionalism and good practice generally, I do agree that lawyers should consider the privacy of litigants and not unnecessarily reveal the private information of the opposite party nor should they seek to embarrass the opposite party… But that does not mean that an action lies for a lawyer’s steps in the conduct of litigation if the opposite party does not like how the lawyer exercised his or her judgment in bringing and serving applications which disclose private information.

The “casual conversation claim” arose from a discussion the lawyer had with another lawyer during a break in discovery in another case. The lawyer said he represented a woman whose former husband had sold a business in Alberta for $15 million and that the couple had three young children. Another person who was present came to believe the lawyer was speaking about the plaintiff.

The Court dismissed the claim because the plaintiff had not proven the fact of the $15 million sale was private. More notable is Justice Wilson’s obiter finding that the lawyer’s disclosure was not “wilful” because he could not reasonably have expected the plaintiff to be identified. She said:

I have found the question of whether Mr. Lessing was wilful in violating Mr. Duncan’s privacy to be a difficult one. On balance, however, because the information he stated was very innocuous; he did not reveal names of the persons or the companies; and there is no evidence that he ought to have known someone in the room would know Mr. Duncan, I find that it cannot be said that he “knew or should have known” that what he said would breach Mr. Duncan’s privacy. I therefore find that if Mr. Lessing did breach Mr. Duncan’s privacy it was not a wilful violation of privacy within the meaning of the Privacy Act.

Duncan v Lessing, 2016 BCSC 1386 (CanLII).

Ont CA majority says no Charter right to text in private

In a case that speaks to the bounds of digital privacy, the Court of Appeal for Ontario recently held that a text message sender has no reasonable expectation of privacy in text messages stored on a recipient’s phone.

Text messaging is a unique form of communication. To text certainly invites the feeling of engaging in a private conversation, but a sender’s texts are received by another person who typically has no duty of confidence and who has exclusive control of the “inbox” in which the texts are invariably left to reside. Like digital messages of all kinds, once sent, a text message is beyond control.

The question for courts in these matters is a normative one – what ought to be treated as private in our society? – so the loss of control over information does not necessarily invalidate a Charter-based privacy claim. Nonetheless, there’s a real practical consequence to the loss of control that Courts must reckon with. If they do not, we risk unduly restricting the free flow of information and free expression. Privacy is always a matter of striking an appropriate balance.

The Court issued its balance-striking judgement about text messaging on July 8th. Justice MacPherson wrote for the majority that denied privacy protection, and held that control was of “central importance” in the context. He wrote:

The facts of this case demonstrate that, unlike in Spencer and Cole, the ability to control access to the information is of central importance to the assessment of the privacy claim. We are not talking about the appellant’s privacy interest in the contents of his own phone, or even the contents of a phone belonging to someone else, but which he occasionally used. We are also not dealing with deeply personal, intimate details going to the appellant’s biographical core. Here, we are talking about text messages on someone else’s phone that reveal no more than what the messages contained – discussions regarding the trafficking of firearms.

This is far from being a question of whether the appellant had “exclusive control” over the content. He had no ability to regulate access and no control over what Winchester (or anyone) did with the contents of Winchester’s phone. The appellant’s request to Winchester that he delete the messages is some indication of his awareness of this fact. Further, his choice over his method of communication created a permanent record over which Winchester exercised control.

It has never been the case that privacy rights are absolute. Not everything we wish to keep confidential is protected under s. 8 of the Charter. In my view, the manner in which one elects to communicate must affect the degree of privacy protection one can reasonably expect.

Justice Laforme dissented – clearly differing from the majority on the importance of control, citing numerous cases in which the loss of control has not precluded the recognition of a Charter-protected privacy interest, stressing that privacy is a normative concept and in general ascribing great value to texting in private.

While the debate between majority and minority about the significance of control and standing to raise section 8 of the Charter is important, the majority and minority do not differ by much in principle. Where they clearly do differ is on the value they ascribe to text messaging. To start with the minority, Justice Laforme says texting is the “modern version of a conversation,” and is nearly romantic about it: “In my view, these private communications are an increasingly central element of the private sphere that must be protected under s. 8.”  Justice MacPherson, in contrast, has no interest in constitutionalizing texting. In a humorous and effective appeal to authority, he links to the Ontario health and physical education curriculum, under which we teach 12-year-olds across the province, “If you do not want someone else to know about something, you should not write about it or post it.” This, of course, dovetails with Justice MacPherson’s important point about electing how to communicate. To people older than 12, we typically say something like, “You want privacy, pick up the phone.”

R. v. Marakah, 2016 ONCA 542 (CanLII).

Federal Court of Appeal reverses certification of privacy class action

On June 24th, the Federal Court of Appeal overturned the certification of a number of causes of action in a class action that claims damages for the sending of a letter that identified the sender as the “Marihuana Medical Access Program.”

The intended recipients were, in fact, individuals authorized to possess medical marihuana. They claim the letter disclosed this fact and exposed them to various harms. The Federal Court certified the action last July based on a finding that the claim set out a number of valid causes of action.

The Federal Court of Appeal allowed the action to proceed based on claim alleging that the government’s negligence (and breach of confidence) caused the following damage: costs incurred to prevent home invasion, costs incurred for other personal security, damage to reputation, loss of employment, reduced capacity for employment, and out of pocket expenses. The Court of Appeal affirmed that a claim for such damages is actionable and “not entirely speculative.”

The Federal Court of Appeal overturned certification of three other causes of action:

  • It held that the pleading did not establish a valid claim of contractual breach because it set out no exchange of promises backed by valuable consideration. The existence of an enforceable contractual contract was also not apparent in the circumstances given the arrangement between government and the representative plaintiff was invited and structured by statute.
  • It held that the pleading did not establish a valid claim for public disclosure of private facts because the pleadings did not support a finding that the government “published” private facts: “…the concept of ‘publicity’ means that ‘the matter is made public, by communicating it to the public at large, or to so many persons that the matter must be regarded as substantially certain to become one of public knowledge.'”
  • It held that the pleading did not establish a valid claim for intrusion upon seclusion because it did not support a finding of the required state of mind (i.e., intent or recklessness): “At best, the material facts pleaded support the notion that an isolated administrative error was made.”

The Court’s limitation of the claim to one based on negligence is significant because it precludes access to “moral damages.” While the Court said the pleaded special damages were not so speculative to disallow the claim, it’s questionable whether the actual damages suffered by members of the class amount to much at all.

Canada v John Doe, 2016 FCA 191.

Why “Border Security” was shut down

The media has reported that a Report of Findings recently issued by the Privacy Commissioner of Canada (OPC) led to the cancellation of the television show “Border Security” – a privately produced documentary that covered the operations of the Canada Border Services Agency (CBSA).

How is it that the CBSA was made liable for a breach of the federal Privacy Act for intrusive action taken by an arm’s-length producer?

In its 26-page report the OPC does probe at the degree of control the CBSA exercised over the producer’s activity but ultimately declined to find that the producer’s collection of personal information was also the CBSA’s collection of personal information. The OPC explained:

However, the question of whether the CBSA can be said to be participating in the collection of personal information for the purpose of the Program is not determinative of our finding in this case. In our view, the CBSA is first collecting personal information in the context of its enforcement activities and thereby has a responsibility under the Act for any subsequent disclosure of the information that is collected for, or generated by, such activities.

Following our investigation, we are of the view that there is a real-time disclosure of personal information by the CBSA to Force Four [the producer] for the purpose of Filming the TV Program. Under section 8 of the Act, unless the individual otherwise provided consent, this personal information collected by the CBSA may only be disclosed for the purpose(s) for which it was obtained, for a consistent use with that purpose, or for one of the enumerated circumstances under section 8(2).

By this reasoning the OPC distinguishes the information flow under assessment from one in which CBSA is simply being observed while conducting its operations. The OPC finding seems to rest on the CBSA’s purposeful provision of access to personal information that would have otherwise been inaccessible – access that invites a “real-time” disclosure of personal information. The OPC applies a novel, expansive conception of a “disclosure.”

From time-to-time organizations are faced with a concern about the potentially invasive activities of others on their property or otherwise within their domain. Most often, they can take comfort in the availability of an “it’s not my collection and not my doing” defence. This OPC finding illustrates when such a defence might not be available.

Report of Findings dated 6 June 2016 (PA-031594).

The Saskatchewan OIPC okays health authority’s incident response

On June 8th, the Office of the Saskatchewan Information and Privacy Commissioner issued an investigation report in which it held that a regional health authority responded appropriately to a privacy breach. Most notably, the OIPC reinforced a recommendation about notification included in its 2015 publication, Privacy Breach Guidelines. The recommendation:

Unless there is a compelling reason not to, [health information] trustees should always notify affected individuals.

This is a novel and conservative variation on the normal harms-related principle that guides notification. It is simply a recommendation – and one directed only at public agencies and health information trustees in Saskatchewan. It is notable nonetheless, however, in that it reflects an arguably developing public sector norm. Right or wrong, there is a unique pressure on public sector institutions to notify that should always be considered as part of a public sector institution’s careful response to a data handling incident.

Investigation Report 101-2016 (8 June 2016).