On February 17th, the Federal Court of Appeal re-clarified that protective orders ought to be granted based on the test set out in AB Hassle – i.e., when “the moving party believes that its proprietary, commercial and scientific interests would be seriously harmed by producing information upon which those interests are based.” It held that the application of the more restrictive test for confidentiality orders set out in Sierra Club was not warranted.
On February 28th, the Nova Scotia Court of Appeal held that a motor vehicle accident plaintiff was not entitled to production of her insurer’s policy documents merely because she had alleged bad faith. It held that these documents might be relevant, but the plaintiff failed to meet an evidentiary burden to establish relevance. Justice Farrar explained:
Although the pleadings are a factor to be taken into consideration in determining whether documents are relevant, they are not the only factor. If that were the case, adroit counsel could draft pleadings in such a manner to allow a party to embark on a fishing expedition. This is precisely what the Rules were intended to avoid when they were amended to move from the “semblance of relevance” test to relevancy. The motions judge’s decision, in my view, reverts to the “semblance of relevance” test. Allegations, no matter how specifically worded or drafted, which have no basis in the facts or the evidence without more, cannot be the basis for a production application. This is particularly true here, where there was a dearth of evidence before the motions judge.
On October 22nd, the Federal Court of Appeal affirmed a counsel’s eyes only order, affirming that such orders are available in Federal Court (despite the impact on the solicitor-client relationship) when there is a “real and substantial risk that is grounded in the evidence.” It based its affirmation on the following analysis of the facts:
The judge noted that Mr. O’Hara was the sole employee of the appellant and the driving mind behind its product development and business decisions. The judge had a well-founded concern that it would be difficult, if not altogether artificial, to expect Mr. O’Hara to completely divorce his mind from that information. Given the small and highly competitive market in which the parties both operate, this would have obvious and significant consequences for the respondents.
On December 28th, Justice Sweeny ordered a plaintiff to submit to another medical examination because he surreptitiously recorded a prior examination, commenting:
The surreptitious recording of the examination was improper. The effect of this recording is the doctor would now, most likely, be subject to cross-examination on issues as to what exactly happened in the course of the examination. The evidence of the plaintiff is also relevant. Mr. Cruz may be examined or cross-examined on the transcript. If the doctor was aware of the recording, he may have conducted his examination a different way. He may have been clearer in the language used. He may have been more specific is instructions given to the plaintiff. Much of the communication that goes on is nonverbal. The doctor was denied an opportunity to ensure that his words and conduct were being accurately recorded.
On September 13th, the Federal Court of Appeal held that the Public Service Labour Relations and Employment Board was not functus officio and ought to have entertained an employer’s request to redact witness names.
The employer claimed it made an unopposed request to obscure the identities of several non-union witnesses during the Board’s hearing. When the Board issued a decision that included full names, the employer wrote the Board and asked for a correction. The Board disagreed that the employer had made a request during the hearing and held it was functus officio. The employer brought an application for judicial review, compounding the problem by filing an un-redacted copy of the decision on the Court’s public record.
The Court accepted affidavit evidence from the employer and held that it had, in fact, made an unopposed request during the hearing. Alternatively, the Court held that the Board had the power to amend its decision based on section 43 of the Public Service Labour Relations Act. The Court also ordered that its record be treated as confidential and that the applicant file new materials with witness names replaced by initials, stating, “So doing provides little, if any, derogation to the open courts principle as [the witnesses’s] identities are not germane to the decisions.”
This is an unfortunate example of (a) rising sensitivities regarding the inclusion of personal information in judicial and administrative decisions and (b) the need to be careful about it. This affair (which shall continue) could have been avoided if the parties had asked the Board to make a formal order during course of the hearing. The employer also ought to have brought a motion for a sealing order at the outset of its judicial review application, before filing un-redacted materials (a point that the Court made in its decision).
Hat tip to Ian Mackenzie.
On July 25th, the Ontario Superior Court of justice dismissed an action under a new provision of the Ontario Courts of Justice Act intended to dissuade persons from bringing “strategic lawsuits against public participation” – so called “SLAPP” suits.
The plaintiff is a company that operates a gravel pit. It sued a Stouffville teacher who made two postings to Facebook about a municipal approval that allowed an expansion of the company’s operation. The defendant made the posts without reading the engineering report the plaintiff had filed with the municipality or taking any other significant steps to inform herself of the issue. She said the defendant would profit significantly from the approval, the municipality would not, and the defendant “would potentially poison our children.” When the plaintiff demanded an apology, the defendant apologized. The plaintiff sued anyway.
The plaintiff agreed that the defendant’s expression related to a matter of public interest – leaving the plaintiff to establish that its proceeding had “substantial merit,” that the defendant had “no valid defence” and that it had suffered (or was likely to suffer) “sufficiently serious harm” in order to survive dismissal under the CJA’s anti-SLAPP provision. The Court held that none of these criteria were met, dismissed the action and awarded $7,500 in damages to the plaintiff (in part reflecting how the plaintiff conducted its proceeding and in part reflecting the defendant’s failure to adduce medical evidence in support of her damages claim).
The judgement means that the burden on a party seeking civil redress for statements made about a matter of public interest is high. In this case, for example, it did not matter that the plaintiff took few steps to inform herself of the issue or used the “unfortunate” word “poison”; informed or not, the Court said the plaintiff had a right to enter the public forum and use emphatic language in doing so without the risk of being sued. Justice Lederer explained:
I am inclined to the view that the legislature did more than just “tilt the balance somewhat”. Rather the legislature created a steep hill for the plaintiff to climb before an action like this one is to be permitted to proceed. The legislation directs that we place substantial value on the freedom of expression over defamation in the public sphere. To put it simply, those who act in the public realm need to realize that not everybody will accept what they wish to do or agree with what they say and may make statements that go beyond what may seem, to the recipient, to be appropriate.
I’ve written here about the difficult position an employer/organization is placed in when its employees are harassed by “outsiders.” On July 20th the Court of Appeal for Ontario illustrated the difficulty by affirming a decision that denied relief from such harassment that a municipality (and its mayor) sought on behalf of the mayor, councillors and staff. The decision suggests that an employer’s duty to provide a safe and harassment free environment provides no basis for a civil remedy.
Rainy River (Town) v. Olsen, 2017 ONCA 605.
On December 21st the Newfoundland and Labrador Court of Appeal held that the implied undertaking does not apply to a medical report produced in a related personal injury action.
The plaintiff was injured in a motor vehicle accident and submitted to an examination in his action against the driver. That action settled, but the plaintiff continued a separate action against his own insurer for disability benefits, which prompted the insurer to seek the report. The Court commented:
In this case, it is difficult to see how the implied undertaking rule is engaged. A medical report, being factual in nature, would be neutral insofar as encouraging the provision of complete and candid discovery, one of the rationales for the rule. Further, the proposition stated by Binnie J. [in Juman v Doucette] that “whatever is disclosed in the discovery room stays in the discovery room” loses its impact and relevance when considered in the context of the factual nature of medical reports and the operation of rules 31 and 34.
The Court also held that the undertaking – implicit rather than express in Newfoundland – is “overridden” by the provisions of the Newfoundland Rules of the Supreme Court that favour production of medical reports.
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.
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:
 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.
 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.
 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.
 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.
 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.
 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:
 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.”