Jones v. Tsige: a banking law perspective.

AuthorKianieff, Muharem

This paper considers the recent Ontario Court or Appeal decision in Jones v Tsige. In this unprecedented case, a bank customer was allowed to sue a bank employee personally for the tort of invasion of privacy after the employee surreptitiously accessed her bank account. The case is significant due to its introduction, for the first time, of an American cause of action under the tort of invasion of privacy. In order to fashion the plaintiff with the personal remedy, however, the Court has failed to consider the application of the Tournier doctrine that has established that banks owe a duty of secrecy to their customers. In so doing, it is argued that the Court has undermined an established tradition of law that provides for a better approach in analyzing the issue from a banking perspective than that used by the Court.

Dans eet article, on examine la decision que la Cour d'appel de l'Ontario a recemment rendue dans l'affaire Jones v Tsige. Dans cette cause sans precedent, la cliente d'une banque a ete autorisee a poursuivre une employee de la banque a titre personnel pour le delit civil d'atteinte au droit a la vie privee apres que l'employee eut subrepticement accede a son compte de banque. L'importance que cette cause revet au Canada est due a l'introduction, pour la toute premiere fois, d'une cause d'action americaine, soit le delit civil d'atteinte au droit a la vie privee. En elaborant ce recours personnel, la Cour a cependant omis d'examiner l'application de la doctrine de Tournier selon laquelle les banques ont une obligation de confidentialite envers leurs clients. En decidant de la sorte, la Cour se serait ecartee d'une tradition de droit etablie qui prevoit une meilleure facon d'analyser des violations dans le contexte bancaire.

Table of Contents I. INTRODUCTION II. PART ONE: JONES V TSIGE AND THE TORT OF INVASION OF PRIVACY A. Facts and Pleadings B. Tort of Invasion of Privacy III. PART TWO: THE TOURNIER CASE AND THE BANKER'S DUTY OF CONFIDENTIALITY A. The Tournier Doctrine B. Tournier in Canada C. Information Obtained Surreptitiously and the Law of Confidentiality D. Application of Tournier to the Facts of Jones IV. PART THREE: THE CONSEQUENCES OF FAVOURING THE TORT BREACH OF OVER THE RULE IN TOURNIER A. Developing Standards in Keeping with Consumer Expectations V. CONCLUSION I. INTRODUCTION

In January 2012, the Ontario Court of Appeal handed down a decision that would have tremendous repercussions on privacy law in Ontario. In Jones v Tsige (Jones), the Court definitively ruled, for the first time, in favour of establishing an independent tort of invasion of privacy--an action that previous courts had resisted to varying degrees. (1) The case arose from the fact that the defendant, Ms. Winnie Tsige, abused her position as an employee at the Bank of Montreal (BMO) to surreptitiously access the banking records of the plaintiff, Ms. Sandra Jones, who was also employed by the same bank. (2) In response, the Court held that the only way of giving Ms. Jones a remedy was by allowing her to pursue an action in tort against Ms. Tsige personally, on the basis of an intrusion upon seclusion, a component of the larger tort of invasion of privacy. (3) This tort allows individuals to sue other individuals with whom they have no pre-existing relationship and to recover damages for their loss of privacy and various emotional damages associated therewith.

While the Court characterized the adoption of the tort of invasion of privacy as a positive step in light of new and emerging technologies that threaten personal privacy, that step is not risk-free. (4) The major shortcoming in this case was that the Court chose to undermine the significance of the fact that the actions of the parties took place at a bank, failing to recognize the significance of the banker-customer relationship. As such, the case was decided on the basis of a tort premised upon the fact that one of the parties, as a stranger (or at best, as one who had a tenuous personal relationship with the other), intentionally infringed upon the privacy rights of the other, rather than viewing the issue in the context of a banker-customer relationship. I shall argue that the latter is the better way of characterizing the relationship between the parties. This fact is very significant when considered in the broader context of banking law and the incentives provided therein for banks to be mindful of the interests of their customers-maintaining the confidentiality of their customers' affairs is of the utmost importance, a breach of which may expose them to an action for a breach of confidence. In moving away from actions based upon breaches of confidence and towards actions based upon the tort of invasion of privacy, the Court risks undermining a deep-rooted area of law that has the potential to guide future relationships between people and to further extend professional norms that are more in accordance with individual expectations.

This paper will consider the decision in Jones and re-examine the case from a banking law perspective. Part One will set out the facts and holding in Jones. The case will be situated in relation to the tort of invasion of privacy as developed in American jurisprudence. Part Two will consider the case with a view to applying the banker's duty to maintain confidentiality, as developed in the common law. This is a fundamental concept of the quasi-contractual banker-customer relationship and provides the foundation for many of the modern banking concepts we take for granted today. This section will draw on Anglo-Canadian sources in order to provide a contrast to the approach chosen by the Court. Part Three will assess the doctrinal implications that result from following either approach and offer some concluding observations.


    1. Facts and Pleadings

      The case arises from events that transpired in July 2009 between two employees of the Bank of Montreal. (5) The parties did not know each other directly, but the defendant was in a common law relationship with the plaintiff's former husband. (6) A financial dispute arose between Tsige and her common law partner relating to the child support payments he was making to Jones. Tsige claimed that she wished to verify whether or not Jones' ex-husband was making these payments and did so by using her work computer. (7) Over a period of four years, Tsige looked into Jones' banking records at least 174 times. (8) The information contained in these records included personal details such as Jones' date of birth, marital status and address. (9) At no time did Tsige "publish, distribute or record the information in any way." (10) Jones argued that Tsige's explanation was not consistent with the timing and frequency of Tsige's prying. (11)

      When Jones eventually learned of Tsige's espionage, she complained to BMC). (12) After speaking with Tsige, BMO took disciplinary action "by suspending her for one week without pay and denying her a bonus." (13) However Jones, who was deeply offended by what had transpired, sought retribution from Tsige personally. Jones was reluctant to pursue a remedy against BMO directly since she did not wish to involve her employer by making a compliant under the Personal Information and Electronic Documents Act (PIPEDA). (14) As such, she decided to sue Tsige directly, claiming an invasion of her privacy. (15) It is here we see the case transpire in what, for Canadian jurisprudence, is a novel way of looking at the issue.

      The Court of Appeal agreed with Jones' submission and allowed the cause of action for invasion of privacy to proceed. In so doing, the Court dismissed Tsige's submission that the matter would be best resolved through the PIPEDA legal regime rather than the common law. (16) The reasons for so doing, according to Justice Sharpe, are set out as follows:

      While BMO is subject to PIPEDA, there are at least three reasons why, in my view, Jones should not be restricted to the remedy of a PIPEDA complaint against BMO. First, Jones would be forced to lodge a complaint against her own employer rather than against Tsige, the wrongdoer. Second, Tsige acted as a rogue company employee contrary to BMO's policy and that may provide BMO with a complete answer to the complaint. Third, the remedies available under PIPEDA do not include damages, and it is difficult to see what Jones would gain from such a complaint. (17) As can be seen, one of the reasons why the court chose to proceed in the direction that it did was that it wished to provide Jones with a personal remedy against Tsige. This was also coupled with a desire not to hold the bank responsible for Tsige's actions since the court attributed the fault entirely to Tsige. I will return to these reasons in the next sections.

    2. Tort of Invasion of Privacy

      In its reasoning, the Court acknowledged that "the question of whether the common law should recognize a cause of action in tort for invasion of privacy has been debated for the past 120 years." (18) The Court mentioned the cause of action for breach of confidence in passing before citing the case of Ontario (Attorney General) v Dieleman (1994), (19) and quoted with approval from that case where the Court held "that invasion of privacy in Canadian common law continues to be an inceptive, if not ephemeral, legal concept, primarily operating to extend the margins of existing tort doctrine." (20) The Court subsequently drew upon the seminal American work that is said to provide the foundational basis of the tort, Samuel Warren and Louis Brandeis' 1890 article, "The Right to Privacy." (21) In this work, Warren and Brandeis famously described this right as the "right of the individual to be let alone." (22) This work subsequently influenced William Prosser, who further refined this right into four different torts that encompass this wide-ranging theme. (23) These four torts included:

      1. Intrusion upon the...

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