More progress toward a tort of invasion of privacy in Ontario

The Ontario Superior Court of Justice has just released an interesting case considering relief from the implied undertaking rule and the potential of a tort of invasion of privacy in Ontario. (The implied undertaking rule generally prohibits the use of any information obtained in litigation for a purpose other than the instant litigation.)

Shred-Tech Corp. v. Viveen, 2006 CanLII 41004 (ON S.C.) is a case in which Shred-Tech is suing former employees for violating a non-competition covenant. The plaintiff Shred-Tech hired a private investigator to look into the situation and the PI's report was part of the rationale for initiating the lawsuit. When the PI's report was disclosed to the defendants as part of pre-trial discovery, the defendants discovered that the PI had obtained the defendants' calling records from Bell Canada and had covertly videotaped on the defendants' new business premises.

In the motion before the Court, the defendants sought an order for relief from the implied undertaking rule so they could use the materials to launch complaints under the Personal Information Protection and Electronic Documents Act, S.C. 2000, c. 5; and the Private Investigators and Security Guards Act, R.S.O. 1990, c.P. 25.

The Court granted the order requested and made the following observations (the observations about the tort of invasion of privacy must be considered to be obiter dicta, but will likely be quoted as further support of the existence of the tort in Ontario):

The distinguishing feature of this motion is the reference to privacy rights, a relatively new development in our law. Public concern as to the manner of collecting personal information, and the use made of it resulted in legislative response. The Personal Information Protection and Electronic Documents Act came into existence in 2000 and is presently under review, no doubt due to the now recognized importance of privacy rights. A regulatory body was established to handle complaints regarding contraventions. There is, of course, other legislation that may be relevant to the nature of the complaint regarding the investigator’s conduct.

[27] In Ferency v. MCI Medical Clinics 2004 CanLII 12555 (ON S.C.), (2004), 70 O.R. (3d) 277 (Ont. S.C.J.), the defendant retained a private investigator to conduct video surveillance of the plaintiff. At trial, the defendant sought to use the video evidence for impeachment purposes. The plaintiff’s opposition to admission of the evidence relied on the Personal Information Protection and Electronic Documents Act. Dawson J. rejected the plaintiff’s submissions and raised the question of the statute’s application in the circumstances of that case. He also determined, by applying the principles of agency, it was the defendant who, in effect, collected the information for personal use in the defence of the plaintiff’s allegations.

[28] Ferency, as noted, dealt with the issue of admissibility of evidence at trial. Of particular importance was that the surveillance occurred in public. Dawson J. found the plaintiff had given “implied consent” saying at para. 31:

The complainant has effectively, by commencing this action and through her pleadings, put the degree of injury to her hand and its effect on her life into issue. One who takes such a step surely cannot be heard to say that they do not consent to the gathering of information as to the nature and extent of their injury or the veracity of their claim by the person they have chosen to sue. Consent is not a defined term under the Act, and there is no indication in the Act that consent cannot be implied.

[29] In the case at bar, however, the defendant’s present evidence to suggest information was obtained in circumstances that do not support a finding of consent, implied or otherwise, particularly with reference to their Bell Canada records.

[30] There is some debate as to whether there now exists a tort of invasion of privacy. I am of the view recognition of such a tort in law is the logical result of the acknowledgment of privacy rights. There must be a remedy available for the breach of any right. In this regard, I am in agreement with the comment by Stinson J. in Somwar v. McDonald’s Restaurant of Canada Ltd., [2006] O.J. No. 64 (Ont. S.C.J.) where, at para. 29, he said:

With advancements in technology, personal data of an individual can now be collected, accessed (properly and improperly), and disseminated more easily than ever before. There is a resulting increased concern in our society about the risk of unauthorized access to an individual’s personal information. The traditional torts such as nuisance, trespass, and harassment may not provide adequate protection against infringement of an individual’s privacy interests. Protection of those privacy interests by providing a common law remedy for their violation would be consistent with the Charter values and an ‘incremental revision’ and logical extension of the existing jurisprudence.

[31] The investigation appears to have resulted from the concerns of the plaintiff regarding the conduct of the defendants in establishing a competing business. The allegations raised by the defendants regarding the manner of the investigative process are serious. Evidence is provided in support of these allegations. The evidence is not challenged. Indeed, by their failure to defend the counterclaim and respond to this motion, Sintrack and Mrowiec are deemed to admit the validity of the allegations. The defendants’ Bell Canada records, for example, were obtained by the investigator without the consent of the defendants or court order. The obvious question is how such occurred and, indeed, whether an illegal act is involved.

[32] The evidence presented by the defendant is sufficient to establish, at least, the basis of their claim. This triable issue will be determined in due course.

[33] In this case, it would be unjust to restrict the enforcement of privacy rights to the lawsuit. If the rights were violated, damages may be awarded but such, in my view, ought not be the exclusive remedy. Regulatory bodies, established for this very purpose, must be permitted to investigate the complaint and have made available to it the best evidence. Preventing a regulatory investigation, by restricting the evidence that may be considered would, in effect, condone what may be an illegal act. Such is clearly not the intent of the deemed undertaking rule.

[34] The defendants have established entitlement to the relief claimed on this motion regarding Sintrack and Mrowiec. The intended complaint is not for an improper purpose but, rather, for a legitimate inquiry by a regulatory body. While connected to the issues raised in the lawsuit, the complaint goes further in terms of the challenged conduct.

[35] There is no evidence, at present, implicating the plaintiff or its corporate officials in the investigative process. Indeed, in their defence to the counterclaim, they deny any involvement. It is to be noted, as well, the plaintiff made disclosure of the investigative report and other information as required in the discovery process.

[36] Counsel for the defendants relies on the concept of agency in arguing in favour of allowing the complaint to proceed regarding the plaintiff, Glass and Roberto. The principles of agency may be relevant in a consideration of admissibility of evidence, such as in Ferency, or with respect to the tort claim. To subject others to a regulatory investigation necessitates a foundation for the claimed relief. Agency, in my view, is insufficient for this purpose.

[37] Counsel for the defendants also suggested a lack of evidence ought not be a determining factor, referring to the comments of Granger J. in 755568 Ontario Ltd. v. Linchris Homes Ltd., supra, at p. 651 where he said:

The plaintiff in its motion, which is not supported by any affidavit material setting out its motive, seeks leave to send the transcripts of the examinations for discovery to the police in order that an investigation can be carried out, and presumably charges laid, if there are reasonable and probable grounds to believe that an offence has been committed. In my view I need not, nor should I, determine if there are reasonable and probable grounds to believe the defendants have committed a criminal offence. The sole issue is whether the request of the plaintiff is a bona fide request or made for a collateral purpose.

[38] With respect, I do not read this passage as saying evidence is not required. Granger J. refers to a “bona fide request” which, in my view, necessitates some evidence. Otherwise, an innocent party could be subjected to regulatory or other investigation. Such would be prejudicial in terms of the lawsuit and, as well, improper.

[39] In this respect, the motion as it pertains to Shred-Tech, Glass and Roberto is premature. Examinations for discovery have not yet taken place. It may be that evidence will become available and, therefore, the defendants ought then be permitted to seek relief. At this point, however, without an evidentiary foundation, the motion must be dismissed as against these parties.

[40] On behalf of the plaintiff, counsel submits prejudice will result even by allowing the complaint to proceed with respect to the investigators. No affidavit or other evidence was presented in support of this position. Judicial notice, as referred to in Ribeiro, would acknowledge the possibility of some involvement in the complaint process, such as a witness. It is to be noted, however, it was the plaintiff who retained the investigators.

[41] I do not see any significant prejudice to the plaintiff in this regard. Any prejudice is far outweighed by the injustice to the defendants if the complaint could not proceed. The defendants have an absolute right to present their complaint to the regulatory bodies. The documents and other information is the best evidence and such is of critical importance in a regulatory inquiry.

[42] I am also of the view there is a public interest in allowing the complaint to proceed against the investigators. A potential breach of a privacy right is an important matter for the complainant and for the public. If the complaint is found to be legitimate, prevention of future abuse of the rights of others is an important consideration.