Court of Appeal for Ontario

Date: 2018-03-28 Docket: C64609

Panel: MacFarland, Huscroft and Nordheimer JJ.A.

Between

Nancy Oliveira Applicant (Respondent)

and

Aviva Canada Inc. and Scottish & York Insurance Co. Limited Respondents (Appellants)

Counsel

Deborah Berlach, for the appellants

Stephen J. Moreau and Michael Mandarino, for the respondent

Heard and released orally: March 23, 2018

On appeal from: the judgment of Justice Markus Koehnen of the Superior Court, dated October 17, 2017.

Reasons for Decision

[1] We agree substantially with the reasons of the application judge. There can be no dispute that the legal test for the interpretive exercise he set out at para. 12 of his reasons is the correct one. The language of the policy clearly covers claims for the invasion of privacy which includes intrusion upon seclusion. By its policy language the appellants agree "to pay those sums that the insured becomes legally obligated to pay as damages because of personal injury to which this insurance applies". The policy defines who is insured under the policy as follows:

The unqualified word Insured includes the Named Insured and also include the following additional Insureds but only in respect of liability arising from the operations of the Named Insured:

(ix) all employees of the Insured while acting under the direction of the Named Insured.

[2] The Statement of Claim pleads that the applicant was at all material times employed in her capacity as a nurse at the hospital when she repeatedly accessed J.L.'s private hospital records despite the fact that she, the applicant, was not involved in J.L.'s care. The appellant argues that such unlawful unauthorized conduct cannot "arise" from the operations of a hospital, nor be considered to be "at the direction of the name insured".

[3] We disagree. In our view this is precisely the sort of conduct the policy was intended to respond to. The applicant was employed by the hospital as a nurse and while on duty, in the course of the hospital's operations, to use the language of the policy (which would include the maintenance of patient's health records), she accessed the records that she had apparently no business doing because she was not involved in J.L.'s care. The applicant was employed by the hospital, (she was essentially an employee 24/7) but was only acting under the direction of the hospital when she was on duty as such.

[4] In our view the common sense interpretation of the language can only have this meaning. To hold as the appellant argues that unauthorized access to medical records does not arise out of the hospital's operations, or under the direction of the hospital because it would never direct such conduct, would negate the coverage intended. It is plain that the policy, in covering invasion of privacy, is intended to cover the type of conduct that is alleged in the Statement of Claim.

[5] This was an application to determine the appellant's duty to defend only, which requires a broader interpretive approach than does the obligation to indemnify. See Monenco Ltd. v. Commonwealth Insurance Co., 2001 SCC 49 at para. 29.

[6] The appeal is dismissed. Costs to the respondent fixed in the sum of $7,500 inclusive of disbursements and HST in accordance with the agreement of counsel.

"J. MacFarland J.A."

"Grant Huscroft J.A."

"I.V.B. Nordheimer J.A."