March 31, 2012

KEEPING CURRENT: A New Tort is Born! Ontario Recognizes its First Privacy Tort

Lisa R. Lifshitz

The Canadian province of Ontario's Court of Appeal recently recognized for the first time the right of a plaintiff to bring a civil action for damages for the invasion of personal privacy, drawing upon U.S. legal concepts in the process.

The case of Jones v. Tsige, 2012 ONCA 32 (CanLII) (available here), began in July 2009 when the appellant, Sandra Jones, discovered that the respondent, Winnie Tsige, had been secretly looking at her banking records. The two both worked at the Bank of Montreal in separate branches but for complicated interpersonal reasons (Tsige was involved in a relationship with Jones' ex-husband). Tsige had accessed Jones' banking records at least 147 times over a period of four years. Tsige had reviewed Jones' transactions details, as well as her personal information including date of birth, marital status, and address. Tsige did not publish, distribute, or record the information in any way.

Jones ultimately became suspicious of Tsige and complained to the bank, who found that Tsige had no legitimate reason for viewing the information. The bank determined that she was doing so contrary to the bank's Code of Business Conduct and Ethics and her professional responsibility. Tsige later apologized for her actions, was suspended for one week without pay by the bank, and denied a bonus. Feeling that this was an inadequate remedy given that her privacy interest in her confidential banking information had been "irreversibly destroyed," Jones claimed C$70,000 for invasion of privacy and breach of fiduciary duty and punitive and exemplary damages of C$20,000.

At issue was whether Ontario recognized the existence of a tort of invasion of privacy. Canada presently has a complex patchwork of private sector, public sector, and sector-specific privacy laws. To date, four provinces (British Columbia, Manitoba, Saskatchewan, and Newfoundland) currently have a statutorily created tort of invasion of privacy. All four statutes establish a limited cause of action, whereby liability will only be found if the defendant acts willfully (not a requirement in Manitoba) and without a claim of right. Moreover, the nature and degree of the plaintiff's privacy entitlement is circumscribed by what is "reasonable in the circumstances." The first motion judge found that in Canada, there is no free-standing right to dignity or privacy under the Canadian Charter of Human Rights or at common law. He also added that given the existence of existing privacy legislation protecting certain rights, any expansion of those rights should be dealt with by statute rather than common law. The judge also felt that Jones had pursued the litigation "aggressively" and failed to accept reasonable settlement offers. Jones appealed.

In Canada, the question of whether the common law should recognize a cause of action in tort for invasion of privacy has been debated for the past 120 years. The Ontario Court of Appeal canvassed Canadian, U.S., and English jurisprudence and commentators, including the 1890 Harvard Law Review article "The Right to Privacy" by Samuel D. Warren and future U.S. Supreme Court Justice Louis D. Brandeis and William Prosser's 1960 article "Privacy." The court particularly focused on the Restatement (Second) of Torts (2010) regarding the tort of "intrusion upon seclusion."

The court found it appropriate to confirm the existence of a right of action for intrusion upon seclusion, which it held to be "consistent with the role of this court to develop the common law in a manner consistent with the changing needs of society." They were also aided by the particular circumstance of this case, with facts "that cry out for a remedy," and characterizing Tsige's actions as "deliberate, prolonged and shocking."

Interestingly, the court explicitly dismissed the idea that it was not open to adapting the common law to deal with the invasion of privacy on the ground that privacy is already the subject of legislation in Ontario and Canada more generally. The court also found that Canada's federal private sector act, the Personal Information Protection and Electronic Documents Act (PIPEDA) which would otherwise apply to organizations subject to federal legislation such as banks, does not speak to the existence of a civil cause of action in the province and was therefore unhelpful for Jones. Moreover, the remedies available under PIPEDA do not include damages, and it would be difficult to see how Jones could benefit from lodging a PIPEDA complaint with Canada's federal regulator against her own employer rather than the wrongdoer Tsige.

The Ontario Court of Appeal adopted as elements of the action for intrusion upon seclusion the U.S.Restatement (Second) of Torts (2010) formulation as follows:

One who intentionally intrudes, physically or otherwise, upon the seclusion of another or his private affairs or concerns, is subject to liability to the other for invasion of his privacy, if the invasion would be highly offensive to a reasonable person.

The key features of this cause of action, as found by the court were, (1) that the defendant's conduct must be intentional (including reckless); (2) the defendant must have invaded, without lawful justification, the plaintiff's private affairs or concerns; and (3) that a reasonable person would regard the invasion as highly offensive causing distress, humiliation, or anguish.

The court was very cognizant that it was creating a new tort and went out of its way in its written judgment to reassure the Canadian public that this cause of action will not "open the floodgates" to vast numbers of new claims and that the cause of action will arise only for "deliberate and significant invasions of personal privacy." The court explicitly stated that "claims from individuals who are sensitive or unusually concerned about their privacy" are to be excluded (although it remains to be seen what these will look like). The court then deliberately limited the tort to "intrusions into matters such as one's financial or health records, sexual practices and orientation, employment, diary or private correspondence that, viewed objectively on the reasonable person standard, can be described as highly offensive." The court also cautioned that proof of actual loss is not an element of the cause of action but given the intangible nature of the interests protected, damages for intrusion upon seclusion will ordinarily be measured by a "modest" conventional sum, especially by American litigation standards.

Having established the existence of the new tort, the court then considered the damages that it should award to Jones for her ordeal. The court canvassed damages under Ontario case law, particularly in the related areas such as nuisance and trespass as well as under the four provincial privacy acts, and in typical Canadian fashion, determined that, absent proof of actual pecuniary loss, the awards for such suffering should be "modest." The court found that damages for intrusion upon seclusion in cases where the plaintiff has suffered no pecuniary loss should be "modest but sufficient to make the wrong that has been done" and fixed the range at up to C$20,000.

Leaning to the conservative side once again, the court also commented that it would not "exclude nor encourage awards of aggravated damages" but absent truly exceptional circumstances, the plaintiffs should be held to the above-mentioned C$20,000 range. While Tsige's actions were deliberate and repeated and Jones was upset by the intrusion into her private financial affairs, Jones fundamentally suffered no public embarrassment or harm to her health, welfare, social, business, or financial position and Tsige had apologized for her conduct. Thus, the court placed this case at the mid-point of the identified range and damages were awarded in the amount of C$10,000 with no order as to costs.

While the above damage award to Jones is arguably exceedingly low, especially from an American perspective, the importance of the Jones v. Tsige case is certainly not the financial gain to Jones--it is the fact that this case opens the doors to future plaintiffs to avail themselves of an actual remedy following an "intrusion upon seclusion" event, even with a modest financial payout that recognizes their suffering rather watching their perpetrator merely get a slap on the wrist from the privacy regulator. Despite the attempts of the Ontario Court of Appeal to minimize instances of its application, this new tort is definitely of great interest to Canadians and those who do business in Canada and underscores the growing recognition that Canada's judiciary attaches to the importance of personal privacy and the importance of privacy in Canada more generally.

Lisa R. Lifshitz

Lisa R. Lifshitz is a partner specializing in technology and privacy law at Gowling Lafleur Henderson LLP in Toronto.