



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Duncan v. Lessing,









2018 BCCA 9




Date: 20180109

Docket: CA43883

Between:

Wayne Duncan

Appellant

(Plaintiff)

And

Aaron Lessing and
Lessing Brandon Company LLP

Respondents

(Defendants)






Before:



The Honourable Chief Justice Bauman

The Honourable Mr. Justice Hunter

The Honourable Madam Justice Fisher




On appeal from:  An
order of the Supreme Court of British Columbia, dated July 26, 2016 (
Duncan
v. Lessing
, 2016 BCSC 1386, Vancouver Docket S134041).




Counsel for the Appellant:



D. Burnett, Q.C.





Counsel for the Respondents:



G. Ritchey





Place and Date of Hearing:



Vancouver, British
  Columbia

October 5, 2017





Place and Date of Judgment:



Vancouver, British
  Columbia

January 9, 2018









Written Reasons by:





The Honourable Mr. Justice Hunter





Concurred in by:





The Honourable Chief Justice Bauman

The Honourable Madam Justice Fisher








Summary:

The appellant appeals the
dismissal of his claim for damages under the Privacy Act on the basis that the
defendant lawyer violated his privacy when in the course of bringing a
pre-trial application he caused documents with the appellants private
information to be served on companies not party to the litigation. The
appellant also appeals the dismissal of a separate claim under the Privacy Act
relating to comments of the lawyer that inadvertently revealed information the
appellant regarded as private. Held: Appeal dismissed. The Privacy Act does not
apply to disclosure of private information during judicial proceedings. The
second claim was dismissed primarily on a finding of fact by the trial judge
that the disclosed information had not been shown to be private.

Reasons for Judgment of the Honourable
Mr. Justice Hunter:

[1]

Parties engaged in civil litigation will inevitably encounter intrusions
into their personal privacy. They will be required to disclose information that
they may regard as confidential, including documents not otherwise available to
the adverse party. They will be required to submit to an oral discovery process
that may lead to disclosure of otherwise private information. The law provides
a measure of protection for privacy interests caught up in the litigation
process, but the public interest in arriving at the truth generally outweighs a
partys privacy interest.

[2]

In British Columbia, privacy interests have received statutory
protection through the enactment of the
Privacy Act
, R.S.B.C. 1996,
c. 373. The
Privacy Act
provides a statutory cause of action for
breach of privacy in certain defined circumstances.

[3]

The principal issue in this appeal is whether disclosure by counsel of a
partys private information in application materials prepared in the course of judicial
proceedings gives rise to a cause of action under the
Privacy Act
. The
trial judge held that it did not, relying on the absolute privilege that
protects participants in the trial process from suit in respect of statements
made during that process.

[4]

This appeal requires a consideration of the scope of the
Privacy Act
in relation to the limited common law privacy protection available during civil
litigation. The operative principle is that the public interest in getting at
the truth outweighs the parties privacy interests, but that these interests
are entitled to such protection as can be afforded them without interfering
with the efficient conduct of civil litigation. This principle has led to two common
law rules.

[5]

The first is that parties to litigation and their counsel are under an
implied undertaking not to use private information obtained through pre-trial
procedures in a lawsuit for any purpose other than in relation to that lawsuit.
This rule provides a measure of protection for parties privacy interests. Parties
are free to use information obtained in the lawsuit for the purposes of the
lawsuit and the implied undertaking of confidentiality is extinguished when the
evidence is used in open court.

[6]

The second rule is that an absolute privilege attaches to any statements
made in the course of civil litigation. This rule is located in the law of
defamation and is intended to ensure that the participants in a lawsuit,
including counsel, are not impeded in making such statements or other
communications as they consider appropriate given their role in the
proceedings.

[7]

These rules complement one another in ensuring that the public interest
in securing justice is maintained while providing such protection for privacy
interests as is consistent with this objective.

[8]

The trial judge held that the absolute privilege derived from the law of
defamation applied to bar the appellants first claim for damages under the
Privacy
Act
. I agree with the trial judge that the first claim must be dismissed,
but I do so for different reasons. My reservation about relying solely on the
absolute privilege doctrine is that in my view it requires an extension of the doctrine
beyond the law of defamation. I am reluctant to extend what is an extraordinary
immunity unless it is necessary in order to protect the public interest
considerations that underlie the immunity.

[9]

In this case, I do not consider it necessary to extend the common law
immunity because on a proper interpretation of the
Privacy Act
, the
statutory tort created by the
Privacy Act
does not apply to privacy breaches
that occur during judicial proceedings. This is so, both because the text of
the
Privacy Act
incorporates the absolute privilege arising in the law
of defamation and because the statute preserves the operation of the common law
implied undertaking that applies during litigation proceedings.

[10]

The second claim arises outside the litigation context. The trial judge dismissed
it as not meeting the statutory requirements of the
Privacy Act
. I can
see no error in her consideration of this issue.

[11]

Accordingly, for the reasons that follow, I would dismiss this appeal.

Background

[12]

This case arose from a family law dispute in which claims for property
division, child support and spousal support were at issue. The respondent Mr. Lessing
was counsel for Ms. Duncan.

[13]

Prior to entering into the marriage, Mr. and Ms. Duncan signed
what was described as a Prenuptial Agreement and Matrimonial Property
Agreement (the Prenup Agreement). The Prenup Agreement carved out as Mr. Duncans
separate property a number of assets including Mr. Duncans interests in
his personal holding company, Connor Industries Ltd., and interests held by
Connor Industries Ltd. in three other companies. The validity of the Prenup
Agreement was at issue in the family litigation.

[14]

In the fall of 2012, Ms. Duncans then counsel (not the
respondents) wrote to counsel for Mr. Duncan asking for production of
financial statements and other documents related to Mr. Duncans interest
in various companies. Some time after November 2012, Ms. Duncan changed
counsel to Mr. Lessing and his firm.

[15]

In early 2013, Mr. Lessing instructed an associate in his firm to
prepare a notice of application and supporting affidavit for orders requiring Mr. Duncan
to disclose information on his personal and corporate interests, as well as to
pay interim child and spousal support.

[16]

A single application was prepared. It sought production of records from Mr. Duncan
regarding four companies identified in the Prenup Agreement, as well as three
additional companies in which Mr. Duncan had an interest. Attached to Ms. Duncans
affidavit were copies of corporate searches of companies with which Mr. Duncan
had some association, some financial information from some of the companies,
and Mr. Duncans personal tax returns from 2009 to 2011. The application
was directed to Mr. Duncan and to the companies referred to in the notice
of application.

[17]

Once completed the application materials were filed and sent out for
service on Mr. Duncans counsel and the companies named in the
application. Five of the companies were properly served, but in two cases, the
service agent left the materials with another company unconnected with the
litigation. The trial judge held that this occurred as a result of a mistake by
the service agent.

[18]

A few days after the service of the documents, Mr. Duncans counsel
wrote to Mr. Lessings associate suggesting that the corporations be served
as they might wish to take a position on the application. There appears not to
have been an issue at the time about the appropriateness of serving the
application materials on the seven corporations.

[19]

In a later affidavit, Mr. Duncan objected to the disclosure of the
application materials to these companies and on a subsequent application, sought
an order from the Court restricting the use that could be made of documents
produced by Mr. Duncan. The order made by Saunders J. in response to this
request directed the parties to continue to be guided by the implied undertaking
of confidentiality and the Rules of Court.

[20]

The delivery of this financial information to persons not party to the
litigation is alleged to constitute the first breach of privacy by Mr. Lessing.
Mr. Duncan says that the two applications should have been prepared
separately instead of having one compendious affidavit that dealt with all
issues. He also says that Mr. Lessing should have ensured that the
affidavit material was placed in a sealed envelope marked confidential. He
argues that the breach of privacy is actionable pursuant to the statutory tort
created by the
Privacy Act
.

[21]

The second alleged breach occurred during unrelated litigation. Mr. Lessing
was discussing some of the circumstances in the Duncan case with another
lawyer. He did not mention Mr. Duncans name, but told the other lawyer
that he had an interesting case concerning what law applied when a couple had
lived in Alberta but had a prenuptial agreement the wife wanted to challenge.
He spoke about the fact that the couple had three children and that the husband
had recently sold his business in Alberta for about $15 million.

[22]

For anyone unconnected with Mr. Duncan, the information provided would
not have been sufficiently detailed to identify him, but unfortunately, the
second lawyers client knew Mr. Duncans sister, had met Mr. Duncan
in the past, and deduced that the person Mr. Lessing was talking about was
Mr. Duncan. This led to some embarrassment for Mr. Duncan, who
characterizes this loose talk as a breach of his privacy interests protected by
the
Privacy Act
.

Trial Judgment

[23]

The trial judge held that the first
Privacy Act
claim was barred
by the doctrine of absolute privilege. She began her analysis with this
statement of the law:

[78]      There is
an absolute privilege that protects lawyers involved in litigation from being
sued in separate proceedings for the statements made in court proceedings, even
if the conduct was defamatory or malicious or otherwise wrongful.

[24]

The trial judge explained the public interest rationale for the rule,
citing what is frequently regarded as the source of the rule,
Munster
v. Lamb

(1883),
11 Q.B.D. 588 (Eng. C.A.)
, as well as
this
Courts judgment in
Hamouth v. Edwards & Angell
, 2005 BCCA 172.

[25]

She summarized the evidence relating to both the service
of the application materials on the companies intended to be served and on the
companies unconnected with the litigation that were served in error:

[105]    I conclude that the defendants
purpose for serving the companies named in the Notice of Application and
Affidavit was because the defendants considered that the companies needed to
have notice of the Notice of Application and Affidavit. Whether or not they
were wrong about their interpretation of the
Rules
and the need for
notice, or could have drafted the material differently, does not matter.
The defendants were acting as counsel for their client in furtherance of
her position in an ongoing judicial proceeding and as such they are protected
by absolute privilege from any liability arising from these steps.

[106]    The evidence of Mr. Groves and Ms. Brown
and the evidence revealed by the documents filed at trial leads to only one
inference: the two companies not named in the Notice of Application that were
served by the process server, were served in an attempt to serve one of the
named companies, CSI Coating.



[113]    The only capable inference is that a
mistake was made by the process server in leaving the Application at the 5
th
street and 10
th
street addresses where two unnamed companies had
offices.

[114]    The contents of the Affidavit and
Notice of Application were covered by absolute privilege.

[115]    The
absolute privilege that applies to lawyers working for a client in the context
of an ongoing judicial proceeding provides a defence to intentional misconduct
such as defamation. It clearly also must apply to an error in service of court
documents, for all the same policy reasons. Here the lawyers only purpose
for service was in furtherance of the Family Action.

[26]

The trial judge went on for the sake of completeness to address the
appellants argument that the defendants had only a qualified privilege. The
theory behind the qualified privilege submission was that the two applications,
one of which required disclosure of certain confidential information, one of
which did not, should never have been combined in one omnibus application. The
result was said to create unnecessarily the possibility that persons entitled
to see the application materials for one application would see private
information relevant only to the other application.

[27]

The trial judge did not give effect to this argument, holding as
follows:

[162]    As a matter of ethics, professionalism
and good practice generally, I do agree that lawyers should consider the
privacy of litigants and not unnecessarily reveal the private information of
the opposite party nor should they seek to embarrass the opposite party. The
internal corporate guideline mentioned in
Sovani
is a good guideline. But
that does not mean that an action lies for a lawyer

s steps in the
conduct of litigation if the opposite party does not like how the lawyer
exercised his or her judgment in bringing and serving applications which
disclose private information.

[163]    The tools
available to penalize a lawyer for misconduct in a civil proceeding are
companions to the principle of absolute privilege. While no civil action can
lie for the lawyer

s conduct of the proceeding, the lawyer could face
serious penalties within the proceeding itself, including sanctions for breach
of the implied undertaking of confidentiality, or costs awards for steps taken
that were an abuse of the process. The lawyer could also face professional
disciplinary sanctions by the Law Society, and a loss of reputation.

[28]

The trial judge summarized her conclusions in this way:

[176]    I find no evidence that the
Application documents were served for any reason other than the lawyers
pursuit of their clients interests in the extant Family Action. The documents
were filed in the court proceedings and the service and delivery of them to
other persons was in furtherance of the lawyers

duty to act on behalf
of their client.

[177]    I have analyzed closely the arguments
of the plaintiff that are premised on the assertion that the defendants did not
properly follow the
Rules
or take necessary steps to protect Mr. Duncan

s
privacy when they served the Notice of Application and Affidavit on the various
companies, and I find no merit to those assertions.

[178]    Regardless,
even if the lawyers were careless, mistaken about the
Rules
, malicious,
or insensitive (and I make no such findings), I find that their conduct is
covered by absolute privilege. As such the first claim for breach of privacy or
breach of confidence must be dismissed.

[29]

The second claim did not arise from conduct in furtherance of
litigation, but the trial judge concluded that the information disclosed was
not such as to constitute a violation of Mr. Duncans privacy, and in any
event had not been wilfully disclosed within the meaning of the
Privacy Act
.

Grounds of Appeal

[30]

On appeal, Mr. Duncan does not take issue with the statement of law
that absolute privilege provides lawyers with immunity from suit for what they
say in the course of conducting civil litigation, but says that whether
privilege applies in respect of a breach of privacy claim is not so
straightforward. Mr. Duncans position is that the trial judge
oversimplified the test for absolute privilege by failing to examine the scope
of the privilege and whether the claim for breach of privacy fell within it.

[31]

On the second issue, Mr. Duncan submits that the trial judge erred
in holding that the conversation in which Mr. Lessing revealed the sale
price of Mr. Duncans company was not an actionable breach of privacy.

Issues on Appeal

[32]

On the first claim, the central question is whether the
Privacy Act
applies to disclosure of private information in the course of conducting civil
litigation. I propose to analyze this issue by addressing three questions:

(i)      How are privacy interests
in the conduct of civil litigation addressed in the common law?

(ii)      What is the scope of the
common law doctrine of absolute privilege?

(iii)      How does the common law
doctrine of absolute privilege apply to claims under the
Privacy Act
?

[33]

On the second claim, the question is whether the trial judge erred in
concluding that the requirements of the
Privacy Act
had not been met.

The First Claim

(i)       How are privacy
interests in the conduct of civil litigation addressed in the common law?

[34]

Traditionally, privacy interests during the course of civil proceedings
have been addressed through a combination of rules of court and the implied
undertaking. The implied undertaking permits the use of private information
obtained through pre-trial discovery procedures as an essential part of the
litigation process, but prohibits the use of such information for purposes
outside the litigation process.

[35]

The trial judge did not find it necessary to consider the implied
undertaking in detail in dealing with the appellants
Privacy Act
claim,
but in my view it provides important context in determining whether the
Privacy
Act
was intended to apply to the use or misuse of private information in
judicial proceedings.

[36]

The leading case on the principles governing the implied undertaking
rule is
Juman v. Doucette
, 2008 SCC 8. In
Chellappa v. Kumar
,
2016 BCCA 2, this Court recently summarized those principles:

[35]       In
Juman v.
Doucette
, 2008 SCC 8, the Supreme Court of Canada summarized the principles
governing the implied undertaking rule. The rule holds that evidence compelled
during pre-trial discovery from a party to civil litigation can be used by the
parties only for the purpose of the litigation in which it was obtained. The
foundation of the rule is the statutory compulsion to participate fully in
pre-trial discovery. The rule is designed to encourage open and generous
discovery by assuring parties being discovered of confidentiality. The rule
recognizes that the public interest in getting at the truth in a civil action
outweighs the examinees privacy interest, but that the latter is nevertheless
entitled to a measure of protection. The implied undertaking rule is not
absolute. A party bound by the undertaking may apply to the court for leave to
use the information or documents otherwise than in the action. Further, the
implied undertaking of confidentiality is extinguished when the evidence is
used in open court.

[37]

As explained by Justice Binnie, the root of the implied undertaking is
the statutory compulsion to participate fully in pre-trial oral and documentary
discovery (at para. 20). Pre-trial discovery is an invasion of the private
right to be left alone and the implied undertaking offers some protection to a
partys privacy interests. Justice Binnie explained the relationship between
privacy interests and the litigation process at common law:

[25]      The public interest in
getting at the truth in a civil action outweighs the examinees privacy
interest, but the latter is nevertheless entitled to a measure of protection.
The answers and documents are compelled by statute solely for the purpose of
the civil action and the law thus requires that the invasion of privacy should
generally be limited to the level of disclosure necessary to satisfy that pur­pose
and that purpose alone.

[38]

The limited privacy protection the law affords individuals who are
caught up in civil litigation is the implied undertaking. Justice Binnie describes
the rule in this way:

[27]
the law imposes on the parties to
civil litigation an undertaking
to the court
not to use the documents or
answers for any purpose other than securing justice in the civil proceedings in
which the answers were compelled
.

[Emphasis in original.]

[39]

This limited protection was examined in
Sovani v. Gray et al.;
Jampolsky v. Shattler et al.
, 2007 BCSC 403, leave to appeal to the C.A.
refused, 2007 BCCA 439, a decision relied on by the trial judge. The issue in
Sovani
was defined by the Court in these terms (at para. 2):

whether
disclosure to non parties to the litigation, without the plaintiffs consent,
of information obtained during the discovery process by defendants counsel for
the purpose of obtaining further discovery information from those non parties,
constitutes a breach of the implied undertaking of confidentiality which
attaches to information obtained through discovery.

[40]

This is essentially the issue at bar, except that the breach alleged by
the plaintiff is of the
Privacy Act
rather than the implied undertaking.

[41]

Justice Edwards described the purpose and effect of the implied undertaking
by reference to the role of discovery in the litigation process:

[44]      It is a matter of judgment to be
exercised by counsel what information obtained by parties through the
litigation discovery process needs to be disclosed to non parties in
furtherance of the litigation in which that information has been obtained.

[45]      Any court-imposed constraint on that
judgment is antithetical to the underlying rationale of court compelled
disclosure,
with its necessary intrusion on a litigants general right to
privacy
. That rationale is the need to do justice between the parties.

[46]      Implicit in the law and Rules
governing disclosure is the proposition that
justice between the parties is
best assured when disclosure of all relevant evidence from whatever source may
be compelled by the court
, subject to claims of privilege.

[47]      Imposition of constraints on the
parties use of information obtained through the discovery process in the
litigation in which it is obtained, by expanding the scope of the implied
undertaking, could inhibit counsel in their investigation of the case and
undermine the rationale for court compelled disclosure.



[49]
The law delineating the scope of
the implied undertaking of confidentiality respecting use of information
obtained through the litigation discovery process draws a bright line. Use of
that information within the litigation is permitted use. Use outside the
litigation for an alien or collateral purpose is not permitted without the
consent of the affected party or an order of the court.

[50]      That bright line tends to expedite
litigation, which is the goal of all recent reforms of civil litigation
procedure in various jurisdictions. An obscure line would tend to promote
procedural controversy, which is antithetical to that goal. The current bright
line sacrifices litigants privacy for more procedural certainty. Its ultimate
goal is to achieve a just result in the litigation.

[Emphasis added.]

[42]

The bright line described by Edwards J. delineates the degree of privacy
protection available to a litigant. Information obtained through the discovery
process in a lawsuit may be used for any purpose related to that lawsuit, but
may not be used for any other purpose without consent of the party concerned or
order of the court.

[43]

This limited protection does not prevent a litigant from seeking from
the court a more restrictive order, including limitations on distribution of
the information beyond the parties counsel, requiring litigation advisors to
execute express undertakings of confidentiality or even sealing the file if
necessary. The appellant in this case sought such an order after the events
giving rise to this litigation were made known and eventually obtained a
consent order providing a degree of protection for his personal information.
Absent such special order, a litigants privacy is protected by the implied
undertaking.

(ii)      What is the scope of
the common law doctrine of absolute privilege?

[44]

The trial judge held that the first claim failed because the
respondents conduct was covered by absolute privilege. This immunity was
developed in the law of defamation but is sometimes said to extend beyond
defamatory statements.

[45]

The appellant acknowledges the rule but says that the trial judge has
oversimplified it by applying it to a claim under the
Privacy Act
. It is
the position of the appellant that the scope of the common law immunity does
not extend to breaches of privacy under the
Privacy

Act
.

[46]

To assess this argument, it is necessary to consider the common law
immunity rule in light of its origins in the law of defamation.

Absolute Privilege in the Law of Defamation

[47]

The law of defamation has long recognized that an absolute privilege
attaches to any statements made by lawyers, judges and witnesses in the course
of judicial proceedings.

[48]

The origin of the rule can be found in the judgment of
Munster v.
Lamb
, and particularly this statement by Brett M.R. (at 604):

The rule of law is that what is
said in the course of the administration of the law, is privileged; and the
reason of that rule covers a counsel even more than a judge or a witness. To my
mind it is illogical to argue that the protection of privilege ought not to
exist for a counsel, who deliberately and maliciously slanders another person.
The reason of the rule is, that a counsel, who is not malicious and who is
acting bona fide, may not be in danger of having actions brought against him.
If the rule of law were otherwise, the most innocent of counsel might be
unrighteously harassed with suits, and therefore it is better to make the rule
of law so large that an innocent counsel shall never be troubled, although by
making it so large counsel are included who have been guilty of malice and
misconduct.

[49]

This passage was adopted by this Court in
Hamouth
at para. 37,
where Justice Levine explained the underlying purpose of this privilege as it
applies to counsel:

Granting absolute
privilege to lawyers when they act in the course of their duties to their
clients is for the public benefit. It frees lawyers from fear that in
advocating their clients cause they will be sued if what they say on behalf of
a client is found not to be true.

[50]

The scope of the privilege extends beyond the courtroom. In
Hamouth
,
Levine J.A. provided this general description at para. 2:

There is no
dispute that a lawyer is protected by absolute privilege regarding statements
made in a court proceeding, and that the privilege extends to communications
made in the course of inquiry with respect to or in preparation for judicial
proceedings

[51]

Similarly, this Court has held that the scope of the immunity extends
to communications between a lawyer and a witness in preparation for giving
evidence in judicial proceedings:
McDaniel v. McDaniel
, 2009 BCCA 53 at
para. 29.

[52]

The privilege was said by Levine J.A. also to extend to occasions when
counsel were acting in the course of their duties to their client in the
course of a quasi-judicial proceeding:
Hamouth
at para. 39. It
extends to all preparatory steps taken with a view to judicial proceedings:
Hamburger
v. Fung
, 2015 BCCA 444.

[53]

It is not the nature of the conduct which gives rise to the immunity,
but the occasion on which the conduct is performed. A judicial proceeding is a
protected occasion within the meaning of the rule:
Elliott v. Insurance
Crime Prevention Bureau
, 2005 NSCA 115 at para. 114.

[54]

Much of the appellants argument is focused on the conduct of the lawyer
that he regards as unnecessarily combining two applications into one and serving
the application materials on companies not party to the litigation. This misses
the point of the privilege, which states that a judicial proceeding is a
protected occasion and attaches absolute privilege to any statements made on
such an occasion.

The Relationship between the Implied Undertaking and Absolute Privilege

[55]

There is a relationship between the implied undertaking concerning
documents obtained at discovery and the absolute immunity from suits for statements
made in judicial proceedings. Though the interests which the implied
undertaking and absolute immunity principles are intended to protect are
different, both are concerned with the public policy objective of securing the
proper administration of justice. The purpose of the implied undertaking is to
limit the invasion of privacy interests in civil proceedings without impairing
the efficiency of the proceedings. Absolute immunity on the other hand is
designed to protect freedom of speech and communication in judicial proceedings.

[56]

Lord Hoffman discussed this relationship in
Taylor v. Director of the
Serious Fraud Office
, [1999] A.C. 177 (H.L.) at 207-208:

3.         The Two Principles

The two principles in debate are each well established and
the question before your Lordships is the extent of their reach. The concept of
an implied undertaking originated in the law of discovery in civil proceedings.
A solicitor or litigant who receives documents by way of discovery is treated
as if he had given an undertaking not to use them for any purpose other than the
conduct of the litigation.



Likewise, the core of the principle of immunity from suit is
not in doubt. By the end of the 19th century it was settled that persons taking
part in a trial - the judge, the advocates, the witnesses - could not be sued for
anything written or spoken in the course of the proceedings. The immunity was
absolute and could not be defeated even by proof of malice.



It will be noticed that although
both principles are
concerned with public policy in securing the proper administration of justice
,
the interests which they are intended to protect are somewhat different and
this is reflected in differences in their scope.
The implied undertaking in
civil proceedings is designed to limit the invasion of privacy and
confidentiality caused by compulsory disclosure of documents in litigation.
It is generated by the circumstances in which the documents have been
disclosed, irrespective of their contents. It excludes all collateral use,
whether in other litigation or by way of publication to others. On the other
hand, the undertaking may be varied or released by the courts if the interests
of justice so require and, unless the court otherwise orders, ceases to apply
when the documents have been read to or by the court, or referred to, in proceedings
in open court [citation omitted].

The immunity from suit, on the other hand is designed to
encourage freedom of speech and communication in judicial proceedings by
relieving persons who take part in the judicial process from the fear of being
sued for something they say.
It is generated by the circumstances in which
the statement was made and it is not concerned with its use for any purpose
other than as a cause of action. In this respect, however, the immunity is
absolute and cannot be removed by the court or affected by subsequent
publication of the statement.

[Emphasis added.]

[57]

The two common law rules together provide a coherent structure to ensure
that privacy interests are protected in civil litigation to a limited extent,
but not to the extent of interfering with the broad public interest in securing
justice.

(iii)     How does the common
law doctrine of absolute privilege apply to claims under the
Privacy Act
?

The Statutory Exception

[58]

The relevant portions of the
Privacy Act
are the following:

Exceptions

2  (1) In this section:

"court" includes a person authorized by law to
administer an oath for taking evidence when acting for the purpose for which
the person is authorized to take evidence;



(2) An act or conduct is not a violation of privacy if any of
the following applies:



(c) the act or conduct was
authorized or required under a law in force in British Columbia, by a court or
by any process of a court;



(3) A publication of a matter is not a violation of privacy
if



(b) the publication was privileged
in accordance with the rules of law relating to defamation.



[59]

The effect of s. 2(3)(b) of the
Privacy Act
is to
incorporate the absolute privilege that applies in the law of defamation to
breach of privacy claims by creating a statutory exception to the tort.

[60]

Whether the exception applies in this case depends on the answer to the
following question: would the publication at issue be protected by absolute
privilege if the claim were in defamation?

[61]

In this case, there is no dispute the respondents were acting in the
course of their duties to their client as part of a judicial proceeding when
the alleged violation of privacy occurred. The alleged violation was serving
the materials that contained Mr. Duncans private information on the
companies.

[62]

In my opinion, absolute privilege would have protected the respondents
from suit had the materials contained defamatory statements because the
occasion was protected. Since, according to the rules of law relating to
defamation, the occasion was one to which absolute privilege attaches, the
statutory exception in the
Privacy

Act
applies. As such, there
was no violation of privacy.

[63]

Because in my view s. 2(3)(b) of the
Privacy Act
is
dispositive of the appeal, I do not propose to deal in detail with the other
provisions of the
Privacy

Act
that also support the conclusion
that the statutory tort created by the
Privacy

Act
was not
intended to apply to disclosure of private information during the litigation
process. I note, however, that s. 2(2)(c) states that
an act
or conduct is not a violation of privacy if the act or conduct was authorized
or required under a law in force in British Columbia, by a court or by any
process of a court.

[64]

The effect of this provision is to exclude from the operation of the
Privacy
Act
any act taken in a judicial proceeding that was authorized by a law in
force in British Columbia or any process of a court. This exclusion is
consistent with the conclusion that the common law rule described in
Juman
is the method by which a litigants privacy is conditionally protected during
litigation.

[65]

For these reasons, I would dismiss the appeal in relation to the first
claim.

Does the Common Law Doctrine of Absolute Privilege apply to Breaches of Privacy
generally?

[66]

I have stated why, in my view, the application of the doctrine of
absolute privilege applies to this appeal through incorporation into the
Privacy
Act
by s. 2(3)(b). The trial judge took a slightly different approach,
basing her decision on a broader foundation:

[115]    The
absolute privilege that applies to lawyers working for a client in the context
of an ongoing judicial proceeding provides a defence to intentional misconduct
such as defamation. It clearly also must apply to an error in service of court
documents, for all the same policy reasons.

[67]

This Court has held that absolute immunity for witnesses applies to all
causes of action arising from communications made by them (
Hung v. Gardiner
,
2003 BCCA 257 at para. 34), but I would prefer to leave for another day the
question of the extent to which the immunity applies to counsel for claims
other than in defamation.

[68]

I agree that the immunity developed in the law of defamation can in
principle apply to other causes of action when the public interest
considerations that underlie the privilege apply to those actions. However, it
cannot be the case that it applies to shelter counsel from
all
causes of
action arising out of the conduct of judicial proceedings.

[69]

The most obvious example of a cause of action that can be brought
against counsel for their conduct in judicial proceedings is an action by a
client against a lawyer for professional negligence. The relationship between
professional negligence actions and the absolute privilege is succinctly
summarized in
Remedies in Tort
, ed. by Linda D. Rainaldi, loose-leaf, (Toronto,
Ont.: Thomson Reuters Canada Ltd., 2016), ch. 16.III at 61-62:

§
46      Canadian
courts have consistently held that the public interest in the administration of
justice does not require that lawyers be immune from action at the suit of a
client for negligence in the conduct of the clients civil or criminal case in
court.  immunity from liability for negligence in court does not follow from
the existence of an absolute privilege with respect to anything said in court.

[70]

Malicious prosecution is another cause of action that can be brought
against counsel in relation to their conduct of litigation:
Nelles v.
Ontario
, [1989] 2 S.C.R. 170.

[71]

The challenge of reconciling the absolute privilege doctrine with
non-defamation claims was addressed by the Ontario Court of Appeal in
Amato
v. Welsh
, 2013 ONCA 258. In that case, absolute privilege was set up by
litigation counsel as a defence to a claim by the lawyers client for alleged
breach of fiduciary duty and the duty of loyalty based on statements made or
omitted by the lawyers while representing different clients in a quasi-judicial
proceeding. The lawyers accepted that the absolute immunity did not bar claims
in professional negligence, but argued that a claim could not be based on
statements made or omitted to be made during the hearing.

[72]

The Court of Appeal refused to strike the claims. Cronk J.A. pointed out
that the boundaries of the absolute privilege doctrine are not firmly set and
that its scope and application continue to evolve (at para. 68).

[73]

I agree with Cronk J.A. that the scope and application of the absolute
privilege doctrine are not settled. The doctrine clearly applies to claims in
defamation brought against counsel for anything said during the course of
judicial proceedings, inside or outside court, in order to protect the
integrity of the justice system. The doctrine applies to statements by all
participants in the litigation process, but is particularly important in its
application to litigation counsel because of the need to ensure that counsel are
not impeded from the vital role of zealously advocating on behalf of their
clients without fear of liability for doing so.

[74]

It seems equally clear that the doctrine does not apply to claims of
professional negligence for counsels conduct of litigation, and may not apply
to other claims of clients based on their lawyers conduct in court. Whether it
applies to other causes of action (what was referred to as disputed ground in
Taylor
at 215), will depend on whether the public interest in
protecting the integrity of the judicial process will be impaired by permitting
such claims to proceed.

[75]

It is for these reasons that I prefer to base my conclusion in this
appeal on the statutory exclusion under s. 2(3)(b) of the
Privacy Act
.

The Second Claim

[76]

The second alleged breach occurred during unrelated litigation where Mr. Lessing
was discussing some of the circumstances in the Duncan case with another lawyer
and mentioned that the husband of his client had recently sold his business in
Alberta for about $15 million. Mr. Duncan complained this disclosure of
the sale price of his business violated his privacy.

[77]

The relevant portion of the
Privacy Act
states:

Violation of privacy actionable

(1) It is a tort, actionable without proof of damage, for a
person, wilfully and without a claim of right, to violate the privacy of
another.

(2) The nature and degree of privacy to which a person is
entitled in a situation or in relation to a matter is that which is reasonable
in the circumstances, giving due regard to the lawful interests of others.

(3) In determining whether the act or conduct of a person is
a violation of another's privacy, regard must be given to the nature, incidence
and occasion of the act or conduct and to any domestic or other relationship
between the parties.



[78]

Whether an act or conduct is a violation of privacy will depend on the
context and must be decided on the particular facts of each case:
Davis v.
McArthur
(1970)
, 17 D.L.R. 760 at 763 (B.C.C.A.).


[79]

The second claim for breach of privacy is largely resolved by the
findings of fact made by the trial judge. The appellant complained that the
disclosure of the sale price of his business was a violation of his privacy
rights, but the trial judge was not satisfied that the information disclosed
and the circumstances at hand were such that he was reasonably entitled to
privacy.

[80]

This is a finding of fact or at most, mixed fact and law. There was
evidence to support it and I would not interfere with this determination.

[81]

The trial judge went on to consider whether, even if disclosure could be
characterized as a violation of the appellants privacy rights, it met the test
of wilfulness in the statute.

[82]

Under the
Privacy Act
, for a violation of privacy to be
actionable it must be done wilfully and without a claim of right. No issue
arises as to claim of right. The trial judge was not satisfied that the
disclosure had been done wilfully.

[83]

The meaning of the term wilfully in the
Privacy Act
has not
received detailed consideration. The parties relied on, and the trial judge
accepted as authoritative, a brief comment by Justice Lambert in
Hollinsworth
v. BCTV
(1998), 59 B.C.L.R. (3d) 121 (C.A.) at para. 29, where the
statutory tort was one of three claims that had been dismissed:

I turn first to the
word wilfully. In my opinion the word wilfully does not apply broadly
to any intentional act that has the effect of violating privacy but more
narrowly to an intention to do an act which the person doing the act knew or
should have known would violate the privacy of another person. That was not
established in this case.

[84]

No citation was given for this definition. Justice Lambert appears to
have intended to narrow the meaning of wilfully with this comment, but the
inclusion of the objective standard should have known may not capture the
deliberateness that is implicit in the word wilfully.

[85]

Saskatchewans equivalent legislation,
The Privacy Act
, R.S.S.
1978, c. P-24, also contains the term wilfully in the same context as
s. 1(1) of British Columbias
Privacy Act
. As the trial judge
points out, this term was interpreted in
Peters-Brown v. Regina District
Health Board

(1995), 136 Sask. R. 126, affd (1996), 148
Sask. R. 248 (C.A.):

[32]
Willfully is defined in Blacks Law Dictionary, 5th ed. (St. Paul,
Minn.: West Publishing Co., 1990):

In civil actions, the word [willfully] often
denotes an act which is intentional, or knowing, or voluntary, as distinguished
from accidental.

[86]

The term wilfully appears in many statutes and is usually defined as
meaning deliberately, intentionally or purposefully. It is not necessary for
the purposes of this appeal to define with precision the definition of the
term, but it can be said with some confidence that wilfully does not mean
accidentally. In the case at bar, Mr. Lessing cannot be said to have
deliberately or purposefully violated Mr. Duncans privacy, assuming for
purposes of this argument that the sale price was private information. At most
it was an accidental disclosure.

[87]

I agree with the trial judge that, however characterized, the disclosure
was not made wilfully.

[88]

I also agree with the trial judge that Mr. Lessing exercised poor
judgment in discussing the details of this case in the manner that he did. The
trial judge commented that:

[205]     it was not good
practice for Mr. Lessing to be talking so loosely, and to have provided
the few details he did provide, that: the person he was talking about was the
husband of a client of his; they had three children; they had moved from
Alberta to British Columbia; and the husband had sold his business for $15
million. This information allowed Mr. Pasacreta to guess that the person
being talked about was Mr. Duncan. As a matter of good practice, Mr. Lessing
should not have disclosed this information, even if he was careful to not
disclose names.

[89]

While it may not have been actionable, this case is a good illustration
of the wisdom of lawyers not gossiping about any aspect of their cases that is not
part of the public record.

Adverse Inference

[90]

Finally, the appellant argues that the trial judge erred in not drawing
an adverse inference from the failure of Mr. Lessing to testify. Whether
to draw an adverse inference is a highly discretionary fact-based assessment
which must be accorded deference:
The Cambie Malones Corporation v.
British Columbia (Liquor Control and Licensing Branch),
2016 BCCA 165 at para. 40.
I would not accede to this ground of the appeal.

Disposition

[91]

For these reasons, I would dismiss the appeal.

The
Honourable Mr. Justice Hunter

I AGREE:

The Honourable
Chief Justice Bauman

I AGREE:

The Honourable
Madam Justice Fisher


