COURT FILE NO.: 05-CV-281603PD3

DATE: 2012/05/03

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Contract Testing Inc., Plaintiff

AND: Applied Consumer & Clinical Evaluations Inc., Raymond Berta, Delia Berta, Anne Goldman, and Geralyn Raymond and Elizabeth O’Neil , Defendants

BEFORE: H. Sachs J.

COUNSEL:
Nick A. Porco , for the Plaintiff/Responding Party

James R. Smith , for the Defendants/Moving Parties, ACCE, Raymond Berta, Delia Berta and Anne Goldman

HEARD: May 1, 2012

ENDORSEMENT

[ 1 ] This is a motion for summary judgment brought by the Defendant, Applied Consumer & Clinical Evaluations Inc. (“ACCE”) to dismiss the claim against it. The Plaintiff, Contract Testing Inc. (“CTI”) commenced an action against ACCE and others on January 4, 2005. The cause of action asserted is breach of confidence. The parties accept that there are three essential elements that must be established to sustain an action for breach of confidence:

(a) The information conveyed must be confidential;

(b) The information must have been communicated in confidence; and

(c) The information must have been misused by the party to whom it was communicated to the detriment of the party who confided it. ( Lac Minerals Ltd. v. International Corona Resources Ltd. , 1989 34 (SCC) , [1989] 2 S.C.R. 574).

[ 2 ] For the reasons that follow I find that the Plaintiff has failed to establish two of the essential elements of this test, namely, that the information was confidential and that it was misused by the party to whom it was communicated.

The Test on a Summary Judgment Motion

[ 3 ] Rule 20.04 (2)(a) of the Rules of Civil Procedure provides that a court shall grant summary judgment if the court “is satisfied that there is no genuine issue requiring a trial with respect to a claim or a defence”. In order to determine whether there are genuine issues requiring a trial the motion judge must ask the following question: “Can the full appreciation of the evidence and the issues that is required to make dispositive findings be achieved by way of a summary judgment?” ( Combined Air Mechanical Services Inc. v. Flesch , 2011 ONCA 764 at paragraph 50 .)

The Information Conveyed

[ 4 ] There is no factual dispute about the information that forms the basis for the action. The information was conveyed in an email from Geralyn Raymond addressed to three people at ACCE. The email is dated November 17, 2004. In it Ms. Raymond summarizes certain information that she states that she ascertained as a result of a visit to CTI’s premises. The email provided information concerning the rates that CTI charged; she described the focus group room that CTI used; the fact that CTI has no recruiting room because it used home recruiters; and she described CTI’s testing area, preparation area, report writing area and parking lot.

[ 5 ] The question is whether any of this information can be considered “confidential information” as that phrase is understood in the case law. Generally speaking this means that the information that is not within the public domain. However, something may still be confidential if it is constructed solely from materials within the public domain if it was “brought into being by the application of the skill and ingenuity of the human brain” or if the confider was able to gain an advantage that he or she would not otherwise have had if he had to check only public sources (the “springboard” principle) ( Lac Minerals, supra; Cadbury Schweppes Inc. v. FBI Foods Ltd ., 1999 705 (SCC) , [1999] 1 S.C.R. 142; Coco v. A.N. Clark Engineers Ltd. , [1969] R.P.C. 47 and 129695 Ontario Inc., operating as Upper Canada Office Systems v. Guinchard, 2005 17920 (Ont. Sup. Ct.)).

[ 6 ] With respect to the rates that CTI charges, this is information that CTI would have conveyed to anyone who made the inquiry. It can hardly be described as confidential.

[ 7 ] With respect to the focus group rooms the email simply describes that physical layout of the focus group rooms, gives Ms. Raymond’s impression that they are “cold looking” and adds that recruits are able to communicate with the moderator directly via MSN and that CTI will burn CDs of the sessions that can be available the next day. The email highlights the fact that there is a large kitchen facility and that there is another room available for clients to use when there is a focus group being conducted.

[ 8 ] Both CTI and ACCE are in the business of consumer product testing. Doing this testing can involve using focus groups to give their impressions of the products being tested. For food products a kitchen is needed. There is nothing unusual about the layout of focus group rooms. They are used in the industry all the time. They have a table and chairs and there is a mirror so that people can actually view the group in action. CTI’s focus group room was very much the same as others. CTI made pictures of their focus group room available on their website, which was accessible to members of the public. The website also contained a plan showing the layout of the offices and a description of the offices, including the fact that there is a viewing room with a mirror for clients and another space for clients to meet in.

[ 9 ] With respect to the fact that CTI used “home” recruiters, all this meant was that the people who found them “recruits” to participate in the testing worked from home, not the office, hardly information of value or information that could be considered “confidential” or that would give anyone, including a business competitor, any advantage.

[ 10 ] The most significant aspect of the testing area description was that it had no booths; rather there were computer screens with laptops at small tables. The CTI website at the time contained a page describing the testing area and containing photographs of that area and the kitchen.

[ 11 ] With respect to the report writing area, the email simply stated that “they have four people against the wall writing reports and doing data analysis all in one room”. This is not information of a confidential nature that would be of any value to ACCE.

[ 12 ] With respect to the parking lot, the email described it as “very spacious” which is consistent with the information on the website about there being “lots of free parking directly outside the door.”

[ 13 ] In my view none of this information reached the threshold necessary to constitute “confidential information”. In coming to this conclusion I appreciate that this threshold is not a high one.

The Use that ACCE made of the Information

[ 14 ] The email contained 8 recommendations. First, that ACCE reduce its focus group rates. ACCE produced its rate charts for the period following the impugned visit by Ms. Raymond to CTI. Those charts show two things. First, that ACCE’s focus group rates at the time were not the same as CTI’s rates as disclosed in the email. Second, that ACCE’s rates went up, not down.

[ 15 ] The second recommendation had to do with offering menus to clients, a recommendation that is unrelated to the information gleaned from Ms. Raymond’s visit to CTI. Further, ACCE denied implementing the recommendation and CTI admitted that they had no evidence to contradict this assertion.

[ 16 ] The third recommendation had to do with how to handle high end clients by giving them focus group rooms for free, a recommendation that was not implemented and has no relation to the information gleaned from the Raymond CTI visit.

[ 17 ] The fourth recommendation suggested an open house, another recommendation that was unrelated to the Raymond CTI visit and was not implemented.

[ 18 ] The fifth suggested contacting old focus group renters and letting them know of a promotion whereby costs were reduced significantly. The uncontradicted evidence is that ACCE did not implement this recommendation.

[ 19 ] The sixth made recommendations about staffing that was also not implemented. The seventh and eighth recommendations concerned looking into using MSN to communicate with clients and putting in an updated recording system to allow ACCE to burn CDs for clients. The uncontradicted evidence is that this was implemented, but it was done three years after the email and in response to a specific request from a client.

[ 20 ] CTI argued that ACCE took advantage of the information regarding their focus group room when they did renovations on their premises. The uncontradicted evidence is that ACCE has made no changes to the focus group room it had at the time. Nor did it make any changes to its testing area, parking lot or kitchen facility. Fourteen months after the email ACCE did put in a pocket door to create a second focus group room, but there is no evidence that the design of this room was in any way influenced by any of the information in the email. In 2008, 3 years after the email, ACCE updated its computer system. However, the uncontradicted evidence is that this was as a result of a client’s request.

[ 21 ] In other words, there is no evidence that ACCE ever used or acted upon the information contained in the email.

Conclusion

[ 22 ] For these reasons the motion for summary judgment is granted and the Claim as against ACCE is dismissed. If they cannot agree the parties may make written submissions to me on the question of costs. ACCE shall file their submissions within 10 days of the release of this endorsement; CTI shall have 10 days after receiving ACCE’s submissions to respond and ACCE shall file any reply within 5 days after receiving CTI’s submissions.

H. Sachs J.

Date: May 3, 2012