Our first case this month involves a Motion for production of investigation documents deemed privileged by an insurer.
Our second case this month deals with a denial of a vehicle-loss claim on grounds of arson.
Our last case is a landmark decision from the Ontario Court of Appeal, recognizing for the first time in Canada the common-law tort of “intrusion upon seclusion” for breaches of an individual’s privacy.
Brown v. Ross, 2011 NBQB 313
The plaintiff was seriously injured in a car-and-pedestrian accident. He brought a Motion for the insurer responsible for the defendant, which had been added to the proceedings as a third party, to produce a number of documents relevant to the action.
The accident occurred on January 9, 2009. The insurer’s claims supervisor learned of it on January 16, 2009, and did a media check from which he learned that the plaintiff was in critical condition. Because of this, the supervisor developed the belief that litigation was probable and he moved immediately to retain defence counsel.
The insurer argued that because of the immediate involvement of defence counsel in the matter, its entire investigation was the subject of solicitor-client privilege or litigation privilege.
The Motions Judge held that the insurer was trying to camouflage or mask its ordinary investigation of the accident as all being protected by privilege, but the insurer’s perspective was not supported by recent decisions of the Courts.
Using the two-branch test for privilege advanced by the insurer, the Motions Judge agreed that litigation was a reasonable prospect at the time the matter came to the insurer’s attention, but was not convinced that the dominant purpose of the production of photographs and witness statements taken immediately after the accident was for litigation. Therefore, accident-scene photographs, a statement from the defendant, a short video recording of the accident scene and field notes taken shortly after the accident were not privileged and ordered produced.
As well, the insurer was ordered to review and edit for possible privileged matters the adjuster’s notes and correspondence between the insurer and its hired consultant. The edited adjuster’s notes up to the date the action was filed were ordered disclosed, subject to any specific claims of privilege contained therein.
The Motions Judge also found that communications dealing with reserves were proper subjects of litigation privilege. Similarly, there was another witness statement taken 6 months after the action was filed; the Motions Judge decided that while the contact information of that witness had to be disclosed, the statement itself taken at that stage did not.
Because the plaintiff was substantially successful in his Motion, he was awarded costs of $1,000 against the insurer, payable forthwith.
Brideau v . W awanesa Mutual Insurance Company, 2011 NBQB 314
The plaintiff’s pickup truck was destroyed by fire in suspicious circumstances. The plaintiff’s insurer paid out the amount owing to the plaintiff’s auto leasing company, but denied the plaintiff’s claim for the balance of the truck’s value on grounds of arson. The plaintiff sued the insurer under Rule 80 for the difference, plus punitive damages. The insurer counter-claimed for the amount it paid to the leasing company.
The issue was whether the insurer had proven that the plaintiff had intentionally committed an act of arson or had someone else commit the act of arson, thus vitiating the insurance policy.
The Judge reviewed the evidence as to the sequence of events leading up to the loss and subsequent investigations by the police and the insurer. The plaintiff and her boyfriend had been out celebrating the plaintiff’s birthday, when they wound up getting the truck stuck in snow in a gravel pit. According to the plaintiff, they decided to walk home and leave the truck where it was overnight, then come back for it the following morning. Early the next morning, the local fire department received a call reporting that the vehicle was on fire.
Of note were certain inconsistencies in the plaintiff’s version of events, some issues as to her credibility, and the fact that she was experiencing financial difficulties at the time of loss. Further, an expert report obtained by the insurer concluded that the exact cause of the fire could not be determined from the remaining evidence, but an incendiary act, i.e. arson, could not be ruled out as the cause.
The Judge found on a balance of probabilities that the fire had been intentionally set, but he was not satisfied that the insurer had proven the fire was set by the plaintiff or someone acting at her behest.
In the end, the Judge found in favour of the plaintiff. He refused to award punitive damages against the insurer, however, stating that with the red flags and inconsistencies in the case from the beginning, it was not an appropriate matter for punitive damages.
Jones v. Tsige, 2011 ONCA 32
The plaintiff and the defendant worked at different branches of the same bank. They did not know each other, though the defendant had formed a common-law relationship with the plaintiff’s former husband. Over the course of four years and on 174 occasions, the defendant accessed and reviewed the plaintiff’s private banking records. When caught, the defendant admitted she had no legitimate person for reviewing the plaintiff’s records, and claimed to have done it for personal reasons. The bank disciplined the defendant, who apologized and agreed not to do it again.
The plaintiff brought an action against the defendant claiming the defendant committed a tort against her, namely invasion of privacy, and seeking general, punitive and exemplary damages as well as a permanent injunction against the defendant to prevent further misconduct. The defendant brought a Motion for summary judgment dismissing the plaintiff’s action, in which she asserted there was no such tort as invasion of privacy. The Motions Judge agreed with the defendant and granted summary judgment. The plaintiff appealed.
In its decision, a unanimous panel of the Ontario Court of Appeal began by citing with approval a scholarly article from the United States which explains an individual’s general right to privacy embraces four distinct torts, of which the appropriate class of tort in the case at bar was “intrusion upon seclusion” into a plaintiff’s private affairs or concerns.
The Court of Appeal then canvassed Ontario and other Canadian case law on the subject, observing that while no tort such as intrusion upon seclusion had yet been explicitly recognized in Canada, judges were nonetheless reluctant to dismiss such claims at the pleadings stages as disclosing no cause of action. It also noted that Ontario had already accepted the existence of a tort claim for appropriation of personality, and at the least remained open to the proposition that a tort action would lie for an intrusion upon seclusion.
In the end, the Court of Appeal overturned the Motions Judge and confirmed the existence of a right of action for intrusion upon seclusion. It stated that recognizing such a cause of action was an incremental step that was consistent with the role of the Court to develop the common law in a manner consistent with the changing needs of society.
The tort itself was explained to comprise three elements, namely: (1) the defendant’s conduct must be intentional, such conduct said to include reckless conduct; (2) the defendant must have invaded, without lawful justification, the plaintiff’s private affairs or concerns; and (3) a reasonable person would regard the invasion as highly offensive causing distress, humiliation or anguish.
The Court of Appeal was careful to explain that recognizing the tort did not open the floodgates and claims for intrusion upon seclusion would arise only for deliberate and significant invasions of personal privacy, such as financial or health records, sexual practices and orientation, employment, diary or private correspondence that, viewed objectively on the reasonable person standard, could be described as highly offensive.
The Court of Appeal pointed out that since proof of harm to a recognized economic interest was not included as an element of the cause of action, damages for intrusion upon seclusion would ordinarily be measured by a modest conventional sum, called “symbolic” or “moral” damages, which the Court stated ought to be modest but sufficient to mark the wrong done. After a review of other case law dealing with such damages, damages awards for the tort of intrusion upon seclusion were said to be in a range of up to $20,000, with the specific award in this case, in light of all the circumstances, set at the midpoint of the range, or $10,000.
Although no awards were made in this case for aggravated or punitive damages, the Court remarked that in actions for intrusion upon seclusion such awards were neither excluded, since there were bound to be exceptional cases; nor were they encouraged, since predictability and consistency were paramount values in areas where symbolic or moral damages are awarded and additional damages should therefore not be granted absent truly exceptional circumstances.