CITATION: Broutzas v. Rouge Valley Health System, 2023 ONSC 540

DIVISIONAL COURT FILE NO.: 760-18

DATE: 2023-01-20

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

McWatt ACJ, Stewart, Reid JJ

BETWEEN:

Elia Broutzas and Meagan Ware

Plaintiffs/Appellants

– and –

Rouge Valley Health System, C.S.T. Consultants Inc., Knowledge First Financial Inc., Global RESP Corporation, Nellie Acar, Shaida Bandali, Esther Cruz, Gavriel Edry, Polina Edry, Munish Sethi and Subramaniam Sulur, Jane Doe “A”, Jane Doe “B”, John Doe Registered Education Savings Plan Corporation and Jane Doe “C”

Defendants/Respondents

P. Guy, A. Seely, N. Mizobuchi, for the Plaintiffs/Appellants

P. Hawkins and D. Girlando for Rouge Valley Health System, D. Young and A. Young for C.S.T. Consultants Inc., C. Beagan Flood, N. Henderson and A. Haines for Knowledge First Financial Inc., M. Arbutina for Global RESP Corporation, S. Ahmad for Nellie Acar, No one appearing for Shaida Bandali, I. Iwasykiw for Esther Cruz, B. Radnoff for Gavriel Edry and Polina Edry, No one appearing for Munish Sethi, No one appearing for Subramaniam Sulur, for the Defendants/Respondents

AND BETWEEN:

Anne Kouvas

Plaintiff/Appellant

– and –

Scarborough and Rouge Hospital, Global RESP Corporation, Esther Cruz, and Nellie Acar

Defendants/Respondents

P. Guy, N. Mizobuchi, G. Myers and A. Seely, for the Plaintiffs/Appellants

P. Hawkins and D. Girlando for Scarborough and Rouge Hospital, M. Arbutina for Global RESP Corporation, I. Iwasykiw for Esther Cruz, S. Ahmad for Nellie Acar, for the Defendants/Respondents

HEARD: November 14 and 15, 2022 by videoconference

Overview:

[1] This is an appeal by the plaintiffs in two proposed class actions from the dismissal of their certification motions. They seek an order setting aside the motion judge’s dismissal and an order certifying the actions as class proceedings under section 5 of the Class Proceedings Act, 1992[^1] (the “CPA”).

[2] Although the actions were originally more widely framed, the appeal is entirely focused on the denial of certification in relation to the tort of intrusion upon seclusion against the individual defendants together with the corresponding vicarious liability claims against the hospitals and corporate defendants.

[3] For the reasons that follow, the appeal is dismissed.

The Parties:

[4] The representative plaintiffs are women who gave birth at either a hospital within the Rouge Valley Health System or at the Scarborough and Rouge Hospital between 2009 and 2014. The claims are brought on behalf of all women who gave birth at those hospitals during that time period.

[5] The Rouge Valley Health System and the Scarborough and Rouge Hospital, which have now been amalgamated into the Scarborough Health Network, (the “hospitals”) employed Munish Sethi, Shaida Bandali, and Esther Cruz (the “rogue employees”).

[6] CST Consultants Inc., Knowledge First Financial Inc., and Global RESP Corporation (the “RESP defendants”) are registered distributors of registered educational savings plans (“RESPs”).

[7] Subramaniam Sulur, Polina Edry, and Nellie Acar (the “RESP salespeople”) were independent contractors connected with one of the RESP defendants. Gavriel Edry was an office assistant for Knowledge First Financial Inc. employed by Polina Edry.

The Facts:

[8] The three rogue employees accessed hospital records concerning patients who had recently given birth at the hospitals. They did so independently of one another, using various methods. One of the rogue employees who was in the business of selling RESPs used the contact information to elicit sales. The other two rogue employees sold patients’ contact information to the RESP salespeople, who in turn used the information in their sales efforts.

[9] The hospitals learned of the improper accessing of their records by the rogue employees on separate occasions. They notified the Information and Privacy Commissioner of Ontario and the Ontario Securities Commission, as well as those patients whose information was or was potentially accessed by the rogue employees.

[10] The rogue employees and the RESP salespeople suffered various consequences. Ms. Cruz and Ms. Acar were convicted under s. 426(1) of the Criminal Code[^2] for receiving secret commissions. Ms. Cruz lost her nursing licence. Ms. Bandali, Ms. Edry and Mr. Sulur were convicted of provincial offences under the Securities Act[^3]. The hospitals terminated the employment of the rogue employees and the RESP companies terminated their business relationships with the RESP salespeople.

[11] The Information and Privacy Commissioner of Ontario investigated the incidents, leading to PHIPA Order HO-013. The Commissioner concluded that the hospitals had breached their obligations to protect personal health information from unauthorized access and disclosure pursuant to s. 12(1) of the Personal Health Information Protection Act, 2004[^4] (“PHIPA”). The Commissioner ordered the hospitals to implement changes to their electronic health information system, revise their privacy and confidentiality policies, and provide privacy training to staff. The hospitals complied. Separately, the Privacy Commissioner of Canada found that Global RESP Corporation was responsible and accountable for the actions of its associates, including Ms. Acar, regarding the improper collection and use of personal information pursuant to the Personal Information Protection and Electronic Documents Act[^5] (“PIPEDA”), and recommended procedural changes. Global implemented the recommendations.

The Decision of the Motions Judge:

[12] The motions judge found that the rogue employees did not sell or disclose confidential medical information about the patients. He identified that only contact information relating to women who had recently given birth in the hospitals was disclosed. Those patients were potential sales prospects for RESPs in relation to their newborn children.

[13] Mr. Sethi did not access patients’ electronic health records, but only contact information.

[14] Ms. Bandali had secured a list of newborns with hospital number, date of birth, sex, the mother’s first name, date and type of last hospital visit, (that is: inpatient or clinic), hospital location, date of last discharge, the initials of the attending physician, partial health card numbers and the mothers’ addresses and phone numbers.

[15] Ms. Cruz accessed labels that contained the patient’s name, gender, date of birth, age, date of admission to the hospital, health card number, hospital patient number, the name of the treating physician and the patient’s address and phone number.

[16] All the proposed representative plaintiffs had announced the news of their pregnancies and the births of their children to family, friends and colleagues. Some notified numerous friends on Facebook.

[17] All the proposed representative plaintiffs, in various ways, had provided consent to being contacted by RESP investment dealers or sales representatives before any of the alleged intrusions occurred.

[18] There was no evidence that health records such as clinical notes or examination reports were disclosed as a result of the privacy breach.

Grounds of Appeal:

[19] The components of the tort of intrusion upon seclusion were set out by the Ontario Court of Appeal in Jones v. Tsige[^6] to include three elements: (1) that the defendant engaged in intentional or reckless conduct, (2) that the conduct involved an intrusion, without lawful justification, into the plaintiff’s private affairs or concerns, and (3) that a reasonable person would regard the invasion as highly offensive causing distress, humiliation or anguish. If those three components are established, the behaviour is actionable without proof of damages.

[20] The appellants submit that the motions judge erred in his analysis and application of the criteria under section 5(1) of the CPA in concluding that:

a. there was no basis in fact for the claim of intrusion upon seclusion by the rogue employees in the appellant’s private affairs or concerns (the second element of the tort);

b. a reasonable person would not regard the intrusion as highly offensive, causing distress, humiliation or anguish (the third element of the tort);

c. the RESP defendants did not intrude upon the plaintiffs’ seclusion (the first element of the tort);

d. the class should be more narrowly defined; and

e. a class proceeding was not the preferred legal process.

Analysis:

Did the conduct involve an intrusion into the plaintiffs’ private affairs or concerns?

[21] The first prerequisite to certification as found in s. 5(1)(a) of the CPA is the requirement that the pleadings disclose a cause of action. Certification can be denied if it is “plain and obvious” that no cause of action exists.

[22] The motions judge was required to accept the material facts as pleaded to be true, and he did so. Based solely on the pleadings, he found that the cause of action criteria was satisfied against the rogue employees and he accepted the potential for the hospitals to be vicariously liable. That aspect of his decision was not challenged.

[23] He then turned his attention to s. 5(1)(c) of the CPA and whether there was some basis in fact to establish a cause of action for intrusion upon seclusion based on the circumstances, such that the claims by the class members raised a common issue.

[24] The judge concluded that the plaintiffs did not have a claim which raised common issues establishing the tort. His limited review of the evidence led him to conclude that there was no access to and disclosure of information beyond what he characterized as “contact information” which, while personal, was not private. There was neither a subjective nor objective expectation of privacy in that information. He determined that there was intrusion, but not an intrusion upon seclusion. Thus, the second element of the tort as defined in Jones was not satisfied.

[25] Central to the motion judge’s conclusion was his finding that only personal contact information rather than private information was accessed and disclosed by the rogue employees.

[26] He contrasted the acts in this case with other scenarios listed in Jones at para. 72 in which significant information such as financial or health records, sexual practices, sexual orientation, employment, diary or private sensitive correspondence or records are intruded upon. He concluded that the tort should only be available for significant invasions of personal privacy, consistent with the criteria established by the Court of Appeal in Jones.

[27] Characterizing the extent of the privacy breach as contact information was the motion judge’s interpretation of the facts as applied to the legal components of the tort. The standard of review of this conclusion, which is a finding of mixed fact and law, is palpable and overriding error.[^7]

[28] The evidence disclosed that the extent of the accessed information varied amongst the rogue employees. The computer screen shots taken by Ms. Bandali included a list of newborns with hospital number, date of birth, sex, the mothers’ first names, the date and type of last hospital visits, (i.e. inpatient or clinic), the hospital location, date of last discharge, the initials of the attending physicians, partial health card numbers and the mothers’ addresses and phone numbers. As to Ms. Cruz, the information was taken from printed labels and included in each case the patient’s name, her gender, date of birth, age, date of admission to the hospital, health card number, hospital patient number, the name or code for the treating physician, and the patient’s address and phone number. Mr. Sethi denied inappropriately accessing any patient information and the hospital was unable to determine whether he had done so, given the limitations of its auditing software. There was no evidence that Mr. Sethi accessed patients’ electronic health records.

[29] As conceded by the motions judge and as is obvious from the findings by the federal and provincial privacy commissioners, the breaches of PHIPA and PIPEDA were serious and cannot be condoned. Remedial steps were taken by the hospitals and punitive measures were levied against the rogue employees.

[30] It is not controversial that some of the information was personal, but not private. For example, the names, genders, and addresses of the women in question was the type of contact information that is regularly provided, as for example when showing proof of identity. That was the information that may have been used by the rogue employees and by the RESP salespeople.

[31] In the specific factual context of this case, additional information confirming the birth, including the date, place, child’s name and gender is likewise not private, in that it likely would be shared broadly by the patient in any event and in this case, as the motions judge found, the representative plaintiffs were not shy about publicizing the arrival of their newborn children.

[32] The remaining information that may have been accessed included hospital and health card numbers, an identifier of the treating physician, dates of admission and discharge, and whether the hospital visit was as an inpatient or to a clinic. That information was personal, but not necessarily private. It was certainly not in the highly private category that would include for example financial records (as in Jones), medical charts, sexual information or employment files.

[33] If the context was different such that disclosure of the hospitalization (and, implicitly, the reason for the hospitalization) in itself divulged personal health information that was clearly private, the intrusion upon seclusion might be significant. For instance, one can imagine that unauthorized disclosure of presence in a hospital psychiatric unit or oncology department made implicitly through the divulging of names, addresses and telephone numbers to purveyors of drugs or other products could more closely approach the serious scenarios contemplated in Jones, even without disclosure of more detailed private information. However, on the undisputed facts of this case, that scenario is not present.

[34] The motions judge is entitled to deference in his conclusion that the information to which the rogue employees gained access in the context of this case did not amount to a significant intrusion into the private affairs or concerns of the plaintiffs sufficient to establish the second element of the tort in the sense contemplated by Jones. His decision that there was an intrusion, but not an intrusion on seclusion is not a palpable and overriding error.

[35] This conclusion is dispositive of the appeal. The aspects of this court’s decision that follow are added as obiter dicta to deal with the remaining grounds of appeal.

Would a reasonable person regard the access and disclosure as highly offensive causing distress, humiliation or anguish?

[36] The motions judge held that a reasonable person would not regard an intrusion such as occurred in this case, to use the language from Jones at para. 71, as “highly offensive causing distress, humiliation or anguish” and therefore that the third element was not satisfied.

[37] Although not determinative of the issue, his conclusion was supported by the fact that in cross-examination on their affidavits filed, none of the representative plaintiffs subjectively alleged such a reaction.

[38] Within the context of establishing the elements of intrusion upon seclusion, Sharp J.A. in Jones wrote at para. 72: “These elements make it clear that recognizing this cause of action will not open the floodgates. A claim for intrusion upon seclusion will arise only for deliberate and significant invasions of personal privacy” (emphasis added).

[39] It is implicit from Jones that the opening of litigation floodgates is to be avoided. That risk is diminished by limiting certified claims to those where intrusions are into significant private matters that, viewed objectively on the reasonable person standard, can be described as highly offensive.

[40] That approach was adopted by this court in Stewart v Demme[^8] at paras. 22 and 27, in which Justice Sachs observed that the tort of intrusion upon seclusion offers a remedy not in every privacy breach but only in situations where the privacy intrusion is very serious.

[41] Viewing the intrusions by the rogue employees as objectively falling short of being so highly offensive as to cause distress, humiliation or anguish was the motion judge’s interpretation of the facts as applied to the legal components of the tort. The standard of review of this conclusion, which is a finding of mixed fact and law, is palpable and overriding error.

[42] We acknowledge that the purpose of the certification motion is not to weigh the merits of the plaintiffs’ claim. As Chief Justice McLachlin observed in Hollick v. Toronto (City)[^9], the certification stage focuses on the form of the action so the question is not whether the claim is likely to succeed, but whether it is appropriately prosecuted as a class action.

[43] In support of the motion to certify, the representative plaintiffs must provide sufficient evidence to support certification, and the opposing party may respond with evidence of its own to challenge certification.

[44] In reviewing evidence on the relatively low “some basis in fact” standard endorsed in Hollick, there needs to be a finding that the proposed common issue actually exists and that the proposed issue can be answered in common across the entire class.

[45] The appellants submit that as a matter of policy, potentially viable class actions should not be screened out at the certification stage pending the more extensive factual analysis that could be made in a summary judgment motion or at a common issues trial. However, it is a legitimate part of the certification process to prevent cases from going forward when they do not demonstrate a reasonable foundation for the elements of the tort that are required. In this case, we agree with the motions judge that the evidence called by the plaintiffs failed to establish facts that can be reasonably characterized as so highly offensive as to cause distress, humiliation or anguish. Annoyance, aggravation, or indignation is not enough. Untenable claims should be dealt with at an early stage in certification proceedings.[^10]

[46] The appellants submit that characterizing the intrusion as highly offensive should follow from the conclusions reached by the provincial and federal privacy commissioners. We acknowledge that the protection of privacy is an important societal concept, as demonstrated by the statutory and regulatory provisions of PIPEDA and PHIPA. However, while consistency across tort and statute law concerning privacy protection may be desirable, the elements of each and the remedies they provide are distinct.

[47] In the context of this appeal, the motions judge is entitled to deference in concluding that a reasonable person would not regard an intrusion such as occurred in this case as highly offensive and a cause of distress, humiliation or anguish so as to establish the second element of the tort in the sense contemplated by Jones. There was no palpable and overriding error.

Did the RESP defendants intrude upon the plaintiffs’ seclusion?

[48] The motions judge ruled that, even accepting the allegations in the statement of claim to be true, there was no tenable cause of action pleaded against the RESP salespeople. On the facts as pleaded, they did not intrude. They did not access or disclose any hospital records.

[49] As observed in Owsianik at para. 35, a determination of whether a plaintiff has pled a cause of action for the purposes of s. 5(1)(a) of the CPA raises a question of law alone, which is reviewable on a correctness standard.

[50] The RESP salespeople were clearly not the “intruders” into the personal affairs of the women who gave birth. That status belonged to the rogue employees.

[51] For the RESP salespeople to face liability for intrusion upon seclusion, the scope of the tort would have to be extended, based on the fact that they knew or should have assumed that the information received by them came through a privacy breach and as such they became parties to the breach.

[52] As set out in Jones at para. 69, a key driver for recognition of the tort of intrusion upon seclusion was that the facts cried out for a remedy which otherwise would not be available in response to the wrong that had been committed. In this case however, unlike the situation in Jones, the failure to recognize a claim against the RESP salespeople as intruders would not result in there being no effective legal remedy available to those whose privacy was invaded. There is no need for the scope of the tort to be extended to a second degree of intrusion, since the rogue employees and their employer hospitals (through vicarious liability) are available as primary tortfeasors.

[53] We conclude that the motions judge was correct in determining that no cause of action existed on the facts pleaded as between the plaintiffs and the RESP salespeople.

[54] The appellants submitted that the motions judge also erred in concluding that the RESP defendants could not be vicariously liable for the actions of the RESP salespeople. Since we have determined that the motions judge did not err in finding no cause of action between the plaintiffs and the RESP salespeople, it is unnecessary to decide whether vicarious liability applies to the RESP defendants through their independent contractor relationship with the RESP salespeople.

Was the proposed scope of the class unreasonable?

[55] Under section 5(1)(b) of the CPA, there must be a clearly identifiable class that would be represented by the plaintiffs for certification to be granted.

[56] The plaintiffs’ proposals mirrored the contact criteria adopted by the hospitals when they gave notice to their patients about the privacy breach. The dates encompassed the earliest and latest dates on which there might have been wrongfully accessed information. The hospitals provided notice to approximately 15,000 people.

[57] Had the claim been certified, the motions judge would have limited the class to individuals who, during the same date range as proposed by the plaintiffs, were actually contacted by or on behalf of one or more of the RESP defendants.

[58] The problem with the motion judge’s class definition is that it focusses on the receipt and use of the information by the RESP defendants rather than on the improper intrusion by the rogue employees which is a critical component of the tort. We agree with the appellants that it is an error of law to analyse the appropriate scope of the class on that basis. The remedial purpose of the tort is to protect against intrusion into private affairs regardless of how the information may be used.

[59] Further, the motions judge considered that the plaintiffs’ proposed class would result in the problem that arose in Sun-Rype Products Ltd. v. Archer Daniels Midland Company[^11]. In that proposed price-fixing class action, the potential class members could not know whether they had purchased products containing the price-fixed ingredient, and therefore whether they were properly members of the class. In this case, by contrast, the proposed class members could identify whether they gave birth in one of the hospitals during the relevant time period. The potential overbreadth of the class definition to include patients whose information was not actually accessed is a different question and not a reason to narrow the class definition at the certification stage. Additionally, and as a matter of fairness, the fact that the hospitals were found by the Information and Privacy Commissioner of Ontario not to have had adequate auditing records in place so as to identify accesses to personal information should not be a reason to reduce their potential exposure to liability.

[60] Based on the foregoing, we conclude that the motions judge committed an error of law in the class definition and in rejecting the scope proposed by the plaintiffs.

Was class proceeding the preferable procedure?

[61] For certification, s. 5(1)(d) of the CPA requires that class proceedings must be the preferable procedure for the resolution of common issues between the parties. As noted by the motions judge, the preferability analysis must be conducted through the lens of judicial economy, behaviour modification, and access to justice.

[62] Using the “some basis in fact” approach, the representative plaintiff must satisfy the court that a class proceeding would be fair, efficient and manageable as the preferred option for resolving the claim.

[63] The class as defined by the motions judge was relatively small. The evidence of actual disclosure by the rogue employees was in the range of 350 sets of patient information. In his view, the rogue employees and the RESP salespeople had already been punished such that no further behaviour modification was required. Similarly, the hospitals had taken corrective actions. Individuals who could demonstrate, unlike the representative plaintiffs, that the intrusion caused them to suffer distress, humiliation or anguish would be entitled to bring individual actions in Small Claims Court. Therefore, he concluded that the plaintiffs did not establish that a class proceeding was preferable to individual litigation, even if there had been certifiable common issues.

[64] Typically, a certification judge’s determination with respect to the preferable procedure criterion under s. 5(1)(d) of the CPA is entitled to special deference because of the weighing and balancing of multiple factors that is performed by a judge who has developed special expertise in such matters[^12]. However, deference is not owed where there are errors in principle directly relevant to the conclusion reached.[^13] and where the motions judge fails to comport with the analytical approach in AIC Limited v. Fischer.

[65] In our view, the conclusion by the motions judge that class proceedings were not the preferable procedure was influenced by what we have found was his error in defining the scope of the class. Once the stricture of that definition is removed, the significance of judicial economy and access to justice is magnified, even if behaviour modification is not clearly needed following compliance by the hospitals with the regulatory orders.

[66] Had this appeal not been dismissed on the grounds set out above, we would have remitted the question of preferable procedure to the motions judge for reconsideration after adjusting the scope of the class.

Costs:

[67] The parties are encouraged to resolve the issue of costs of the motion between themselves. If they are unable to do so, they are to submit Bills of Costs and make written submissions, consisting of not more than three pages in length according to the following timetable:

• The respondents are to serve their Bills of Costs and submissions within 10 days of the date of this decision;

• The appellants are to serve their Bills of Costs and submissions within 20 days of the date of this decision;

• The respondents are to serve their reply submissions, if any, within 30 days of the date of this decision;

• All submissions are to be filed with the court and uploaded to CaseLines within 35 days of this decision.

[68] If no submissions are received by the court within 35 days of this decision or any agreed extension, the matter of costs will be deemed to have been settled.

McWatt ACJ

Stewart J

Reid J

Released: January 20, 2023