Friday, November 16, 2012

Federal Court awards minimal damages for good faith violation of PIPEDA by bank

The Federal Court of Canada, in Biron v. RBC Royal Bank, 2012 FC 1095, recently had an opportunity to consider a claim for damages under PIPEDA where the disclosure of personal information was made "in good faith". In connection with a separate proceeding, RBC Royal Bank responded to a series of subpoenas by providing information about a client (who had a joint account with one of the litigants). The individual complained to the Office of the Privacy Commissioner of Canada and then proceeded to the Federal Court seeking damages. Her claim was for punitive damages in the amount of $10,000, $5,000 for distress and inconvenience and $10,000 for moral damages. The court awarded only $2500, plus costs.

The Court noted:

[31] RBC’s conduct in the present matter does not justify an award of damages since any violation of the Act resulted from an error in good faith. According to RBC, its representatives acted in good faith when disclosing the personal information before a judge of the Superior Court, in the absence of any challenge of the subpoena. Furthermore, RBC is of the opinion that Mr. Poirier was authorized to represent Ms. Biron and to agree on her behalf to the disclosure of the personal information contained in the statements of their joint credit card. RBC alleges that Ms. Bouchard was misled when Mr. Poirier told her verbally that she could provide Ms. Grassby with all of the private information without obtaining a Court order and without restriction as to any of the information in the statements regarding Ms. Biron.

With respect to the calculation of damages:

[37] In Randall, above, the Court writes as follows about the damages awarded under section 16 of the Act:
[55] Pursuant to section 16 of the PIPEDA [the Act], an award of damages is not be made lightly. Such an award should only be made in the most egregious situations. I do not find the instant case to be an egregious situation.

[56] Damages are awarded where the breach has been one of a very serious and violating nature such as video-taping and phone-line tapping, for example, which are not comparable to the breach in the case at bar: Malcolm v Fleming (BCSC), Nanaimo Registry No S17603, [2000] BCJ No 2400; Srivastava c Hindu Mission of Canada (Qu├ębec) Inc. (QCA), [2001] RJQ 1111, [2001] JQ no 1913.

[38] The alleged damages must also result directly from the fault committed (see Stevens v SNF Maritime Metal Inc, 2010 FC 1137 (CanLII), 2010 FC 1137 at paras 28 and 29). The Court notes further that awarding damages under section 16 of the Act is discretionary (see Nammo, above).

[39] As to punitive damages, the Supreme Court of Canada instructs that these “are restricted to advertent wrongful acts that are so malicious and outrageous that they are deserving of punishment on their own” (see Honda Canada Inc v Keays, 2008 SCC 39 (CanLII), 2008 SCC 39 at para 62). In de Montigny, the Supreme Court stated as follows:

[47] While compensatory damages are awarded to compensate for the prejudice resulting from fault, exemplary damages serve a different purpose. An award of such damages aims at expressing special disapproval of a person’s conduct and is tied to the judicial assessment of that conduct, not to the extent of the compensation required for reparation of actual prejudice, whether monetary or not. As Cory J. stated:
Punitive damages may be awarded in situations where the defendant’s misconduct is so malicious, oppressive and high-handed that it offends the court’s sense of decency. Punitive damages bear no relation to [page88] what the plaintiff should receive by way of compensation. Their aim is not to compensate the plaintiff, but rather to punish the defendant. It is the means by which the jury or judge expresses its outrage at the egregious conduct of the defendant.

(Hill v Church of Scientology of Toronto, 1995 CanLII 59 (SCC), [1995] 2 SCR 1130, at para 196)

[40] In the present proceeding, the Court is of the opinion that, in light of the facts of the case, the damages alleged by Ms. Biron can be tied to RBC’s error. The Court is of the opinion, moreover, that it must consider the fact that Ms. Biron asked RBC to stop disclosing her personal information on two occasions. RBC violated its obligations under subsection 7(3) of the Act by failing to properly protect the personal information of one its clients, a disinterested third party in the divorce proceeding between Mr. Poirier and his ex-wife.

[41] Ms. Biron is also claiming punitive damages in the amount of $10,000. There is, however, no evidence on record demonstrating that RBC committed acts against Ms. Biron that were so malicious and outrageous as to warrant an award of punitive damages.

[42] The only evidence submitted by Ms. Biron in support of her total claim for $15,000 in damages, that is, $5,000 for distress and inconvenience and $10,000 for moral damages, is limited to the representations she had to make to the Privacy Commissioner, the letters sent to RBC and the time spent in helping her spouse in defending himself again his ex-wife’s allegations resulting from the review of the money spent using the joint credit card.

[43] The Court therefore concludes that, given that Ms. Biron, as a third party in a divorce proceeding, objected twice to her personal information being disclosed, that she suffered humiliation under paragraph 16(c) of the Act and that the damages sought by Ms. Biron are directly related to RBC’s fault, the Court awards $2,500 plus interest and costs, to be paid to Ms. Biron by RBC.

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