The new tort of “intrusion upon seclusion”, which provides a cause of action to those whose privacy has been breached, was given new teeth this month by the certification of a class action against the Bank of Nova Scotia and its employee, Richard Wilson.

Facts

The central allegations are that Mr. Wilson, a Mortgage Administration Officer employed by the Bank, decided to print out and give his customers’ confidential information to his girlfriend. His girlfriend then distributed this information to individuals who used it to commit identity theft and fraud. The scam was exposed by the Calgary Police in May 2012 when the police found profiles belonging to the Bank’s customers in the course of executing a search warrant against individuals suspected of fraud in Alberta. Mr. Wilson confessed to improperly accessing and printing personal customer profiles for individuals who applied for mortgages from November of 2011 until the end of May 2012, and delivering them to third parties.

The Bank identified 643 customers whose files were accessed, and gave those customers notice that it was possible that there had been unauthorized access to their confidential information held by the Bank and offered free credit monitoring and identity theft protection. As of the date of the hearing, 138 of those customers had notified the Bank that they have been the victims of identity theft or fraud, and the Bank provided them with compensation for their pecuniary losses.

The 643 customers, known as the “Notice Group,” sued the Bank and Mr. Wilson for damages in negligence, breach of contract, breach of fiduciary duty, breach of good faith, and under the new tort of intrusion upon seclusion, claiming damages for emotional suffering, hardship, inconvenience, and waiver of tort. The Court certified the Notice Group’s class action for intrusion upon seclusion and waiver of tort, in addition to the Bank’s alleged breach of contract with those customers and negligent supervision of its employee.

Intrusion upon Seclusion

Jones v. Tsige1 established a tort in Ontario for the intentional or reckless invasion of the privacy of another individual without lawful justification. The harm from such an invasion of privacy must be such that “[a] reasonable person would regard the invasion as highly offensive causing distress, humiliation or anguish.” The Court of Appeal in Jones indicated that “a modest conventional sum” of damages would be appropriate, and that the appropriate range of damages would be up to $20,000. In Jones, the plaintiff Jones and defendant Tsige were two employees of the Bank of Montreal, working at different branches, but Tsige became romantically involved with Jones’s ex-husband and began probing Jones’s financial information by way of her access as an employee of the bank.  Jones was granted summary judgment against Tsige for $10,000.

The question in Evans was whether the Bank was vicariously liable for Mr. Wilson’s actions, which were arguably worse than Tsige’s because he disclosed the information to a third party. The Court went back to the first principles of vicarious liability from Bazley v. Curry.2 The key factor that decided this issue was that the Bank created the opportunity for Mr. Wilson to abuse his power by having unsupervised access to customers’ private information. It did not matter that the Bank was not itself involved in the improper conduct. It also did not matter that the damages for the tort of intrusion upon seclusion are symbolic or moral damages; the Court found that it was not plain and obvious that the Bank was not vicariously liable:

The tort of intrusion upon seclusion has only recently been recognized by the Ontario Court of Appeal and is settled in Ontario. However, until the matter is ultimately decided at the Supreme Court of Canada, I find that the law in Canada is not settled on this issue.

The cause of action has yet to be considered by the Supreme Court of Canada, and not all provinces have established the tort as a cause of action. British Columbia courts have refused to acknowledge a tort of breach of privacy that is independent of privacy legislation.3

However, this is not the first time that the tort of intrusion upon seclusion has been certified as a common issue in a class action. In March, 2014 the Federal Court certified a class action in Condon v. Canada4 partly on the basis of intrusion upon seclusion. The case involved the loss of confidential student information on an external hard drive collected for the Canada Student Loans Program by the Government of Canada. As in Evans, the Court determined that it was not plain and obvious that a claim on the basis of the new tort would fail.

Damages

The Bank in Evans challenged the plaintiffs’ claim for damages for emotional distress because the plaintiffs had not demonstrated that the harm to them rose to the level of a recognizable psychiatric illness, attempting to use the precedent of Healey v. Lakeridge Health Corp.5 However, the Court found that “it is not plain and obvious that the plaintiffs who have suffered real pecuniary damages would not also have the right to claim additional damages for the emotional suffering, hardship and inconvenience they have suffered.”

Further, the Bank challenged the plaintiffs’ claim for damages on the basis of waiver of tort because the alleged wrongdoing had no connection to the Bank’s profits. The Court agreed with the Bank that there must be a “wrongful gain” by the particular defendant for waiver of tort to succeed, but disagreed that the Bank’s profits were unconnected to the Bank’s allegedly negligent supervision of Mr. Wilson, reasoning that inadequate supervision may save the Bank money.6

Conclusion

While it is not the first time that intrusion upon seclusion has been the basis of a certified class action, Evans v. Bank of Nova Scotia is unlikely to be the last if employees of businesses who collect confidential information from their clients and customers lose or misuse that information. As such, until the parameters of the tort are further developed by the courts it is advisable for businesses to supervise employee access to confidential information to ensure that it is not misused in a way that might subject them to potential liability.