Law Times

PAGE 12 FOCUS January 24, 2011 • Law Times Court issues rare damage award Companies to take stock as judge raps credit agency over botched records BY ROBERT TODD Law Times T he Federal Court re- cently issued the fi rst damage award for a privacy breach under s. 16 of the Personal Information Pro- tection and Electronic Docu- ments Act that forced a credit rating agency to pay $5,000 af- ter incorrect information cost a man a business opportunity. Paige Backman, co-leader of Aird & Berlis LLP's privacy team, notes that with a grow- ing list of cases alleging privacy breaches, this case will help Ontario Lawyer's Phone Book 2011 Your most complete directory of Ontario lawyers, law firms, judges and courts With more than 1,400 pages of essential legal references, Ontario Lawyer's Phone Book is your best connection to legal services in Ontario. Subscribers can depend on the credibility, accuracy and currency of this directory year after year. 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"Canada has been histori- cally reticent of awarding damage awards for things that are based on breach of privacy or similar rights," she says. Th e Federal Court case in- volved Mirza Nammo, who sought a business loan to fund a startup trucking company, ac- cording to the ruling of Justice Russel Zinn. But the Royal Bank of Canada declined the loan re- quest, citing bad credit history. Nammo later contacted Tran- sUnion of Canada Inc. to inves- tigate his credit record. It soon became clear the agency had ap- plied information to his fi le relat- ed to another man with a diff er- ent name, birth date, and social insurance number who lived in a diff erent province. Nammo is 28 years old, and the information was for a man who is 44. TransUnion corrected Nam- mo's credit record and informed the Royal Bank of the change. But the TransUnion refused to take responsibility for the mis- take, instead blaming it on the collections agency, CBV Collec- tion Services Ltd. Nammo remained unsatis- For a 30-day, no-risk evaluation call: 1.800.565.6967 Canada Law Book, A Thomson Reuters business. Prices subject to change without notice, to applicable taxes and shipping & handling. OLPB_2011 LT-1/4pg 3X.indd 1 HA1210 11/4/10 10:51:02 AM fi ed with TransUnion's eff orts to explain the mistake and fi led a complaint with the Offi ce of the Privacy Commissioner of Can- ada. It ruled the credit bureau had failed to meet its obligations under PIPEDA to maintain ac- curate information, as required under Clause 4.6 of Schedule 1 of the act. It found the failure "had serious adverse eff ects" on Nam- mo but concluded TransUnion's "swift investigation," correction of the fi le, and notifi cation to the bank had resolved the complaint. Nammo then took the matter to the Federal Court. He sought an order for a procedural review to determine how incorrect infor- mation ended up in his credit fi le; $250,000 for losses caused by the misinformed loan application; and damages for "stress, mental anguish, and embarrassment." Th e court ruled largely in his favour, rejecting the credit bu- reau's argument that it hadn't breached Clause 4.6 of Schedule 1 of PIPEDA because it had ad- equately corrected the inaccurate information. "Just because an organization has taken steps to correct a breach does not mean that the breach did not occur," Zinn wrote. While TransUnion attempted to constrain the court's consid- eration of the complaint, Zinn ruled that s. 14 of PIPEDA off ers broad jurisdictional scope. "It provides that a complain- ant may apply to the Federal Court for a hearing 'in respect of any matter in respect of which the complaint was made,'" Zinn wrote. "In my view, 'any matter' refers to the factual subject matter underlying the complaint, not the legal characterization of the fac- tual issues raised as falling under a particular principle or clause. "Th e decision of the [pri- vacy commissioner] to apply or not apply certain principles or clauses in rendering a decision cannot deprive an applicant of the ability to make submissions to this court regarding other principles and clauses, especial- ly considering that an applica- tion under s. 14 is not a judicial review but a de novo hearing." Th e judge went on to rule that THE LAW OF CLIMATE CHANGE IN CANADA Editor: Dennis E. 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Meanwhile, Backman sug- gests a $5,000 damage award is unlikely to dissuade many organizations from breaching privacy legislation. Th e threat of reputational damage remains the primary deterrent. "Businesses that are very much public-image based are perhaps more concerned about even cases like this getting in front of the courts," she says. Yet David Elder of Stikeman LT0124 www.lawtimesnews.com Elliott LLP's Ottawa offi ce be- lieves executives who have read the Nammo v. TransUnion of Canada Inc. ruling will likely be quick to revisit their companies' record collection and retention practices. "Th ey do have an on- going positive obligation to make sure that it is correct." LT Multiple copy discounts available

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