Documentation:Torts/Breach of confidence

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Breach of confidence
The action of breach of confidence provides redress when a defendant misuses a plaintiff's confidential information.[1][2] It is not a claim in tort, but originated as an equitable cause of action. It is recognized as a precursor to common law invasion of privacy torts in the United Kingdom.[3][4][5][6] Breach of confidence requires the plaintiff to demonstrate an extant relationship of confidence between them and the defendant.[7][8] While a contractual relationship is not required to establish a relationship of confidence, a contract may be evidence supporting the existence of such a relationship between parties.[9][10]

Elements of breach of confidence

Breach of confidence originated as an equitable cause of action which afforded protection against the misuse of confidential information shared by a plaintiff.[11] It imposes an obligation of confidence on the defendant regarding the confidential information disclosed by the plaintiff even when no contractual duty of non-disclosure exists between the parties.[11] Importantly, the obligation of confidence is imposed both on parties whom the confidential information was initially disclosed to and third parties who receive the information with the knowledge that it was communicated in a breach of confidence.[12]

The Supreme Court of Canada, in LAC Minerals v. International Corona Resources Ltd., stated the elements of breach of confidence as follows:

Elements of breach of confidence[6][13]
1. [T]he information covered was confidential;
2. [T]he information was communicated in confidence;
3. [T]he information was misused by the party to whom it was communicated.

Distinguishing confidential information from public knowledge

The Supreme Court of Canada in LAC Minerals emphasized that the information shared must have a quality of confidence about it, meaning common knowledge or publicly available information is not afforded protection.[14] The Court, however, clarified that confidential information may result from work solely created with publicly available information or materials.[14]

While a fine line exists between public information and confidential information in many scenarios, this determination may be made based on whether the defendant gained an advantage by using the confidential information compared to if they had solely relied on public information.[15]

Contract law and breach of confidence

As with other torts, the scope of a defendant's liability may be expanded or narrowed by relevant contractual terms between the defendant and the plaintiff.[16] As such, confidentiality agreements between contracting parties may support an action under the tort of breach of confidence.[17] Moreover, an action for breach of contract will also likely be available to claimants in these cases.[18]

Despite the relevance of contractual terms in defining the availability of a claim for breach of confidence, there no requirement for a claimant to establish an extant contractual relationship with the defendant to succeed in an action for breach of confidence.[10][19] However, the plaintiff must establish facts that show the information disclosed to the defendant was done so in confidence.[20] Thus, Canadian courts have recognized the difficulty of establishing an action for breach of confidence in situations where there is no robust evidence explicating, or implying, a duty of confidentiality to the plaintiff (such as a contract).[21]

Cases such as Jane Doe 72511 v. Morgan[22] and ES v. Shillington[19] demonstrate the difficulties that claimants face in establishing the element of communication in confidence when there is no direct interaction between plaintiff and defendant.

Breach of confidence as a measure of protecting privacy interests

Laying the foundation for common law invasion of privacy torts

While confidential information and private information may overlap, the two interests are distinct within the contemporary jurisprudence of many common law jurisdictions.[23] The distinction between the two interests was explained by Lord Nicholls in OBG Ltd v Allan, where he stated:

As the law has developed breach of confidence, or misuse of confidential information, now covers two distinct causes of action, protecting two different interests: privacy, and secret ("confidential") information. It is important to keep these two distinct. In some instances information may qualify for protection both on grounds of privacy and confidentiality. In other instances information may be in the public domain, and not qualify for protection as confidential, and yet qualify for protection on the grounds of privacy. Privacy can be invaded by further publication of information or photographs already disclosed to the public. Conversely, and obviously, a trade secret may be protected as confidential information even though no question of personal privacy is involved.[24]

The tort of misuse of private information was recognized as its own tort for the first time in the 2004 House of Lords judgement Cambell v. MGN Ltd., where the Court recognized that judicial interpretation of the element of confidentiality had become strained through the use of the breach of confidence action to protect privacy interests.[25] The Court stated that the essence of this usage of the breach of confidence action (i.e. to protect against the improper use of personal information) would be better captured under a tort of misuse of private information.[3] As such, the breach of confidence action has served as a precursor to the common law tort of misuse of private information in the United Kingdom, and the tort of public disclosure of private facts as recognized in several Canadian provinces.[25][26]

Data breaches

The breach of confidence action has been pleaded by claimants in response to personal information leaks arising from data breaches.[27] While these claims often satisfy the elements of confidential information and communication in confidence, claimants tend to struggle in proving the "misuse" of said information.[28] The British Columbia Court of Appeal clarified, in Tucci v. Peoples' Trust Co., that a breach of confidence requires the intentional misuse of the confidential information and cannot be grounded in negligence.[29] However, since data breaches do not often the result from the deliberate misuse by the party whom the data was entrusted in, claims tend to fail on the third prong of the test.[30] The Court in Tucci stated in obiter dicta that other torts such as negligence, breach of privacy, and intrusion upon seclusion are better suited to deal with instances of accidental disclosure of personal information.[29]

Non-consensual distribution of intimate images

"Protecting private information in Alberta"
In this episode of the Lawson Insight podcast, Jennie Buchanan speaks about the 2021 Alberta Queen's Bench decision, ES v. Shillington, and evaluates the various common-law and statutory privacy protections available in Alberta.[31]

In Canada, the breach of confidence action has also been pleaded by claimants in response to the non-consensual distribution of their intimate images (NCDII).[19][32] Canadian courts and commentators have regarded breach of confidence as ill-equipped to provide redress to claimants in these contexts, with reference to the more robust protections afforded to injured parties by Canadian provincial privacy legislation, common-law privacy torts, and the federal Criminal Code.[33][34] The Alberta King's Bench in ES v. Shillington recognized that the requirement for a claimant to demonstrate that the information was communicated to the defendant in confidence often proved fatal to breach of confidence claims in the context of NCDII.[21] This was the case in Jane Doe 72511 v. Morgan where there was no explanation for how the defendant came into possession of the plaintiff's intimate images.[22] Cases such as ES v. Shillington and Jane Doe 464533 v. D(N), however, are examples where the plaintiffs were able to establish the element of communication in confidence and ultimately succeed in their respective actions for breach of confidence.[19][35]

Legislation
Criminal Code, RSC 1985, c C-46, s 162.1[36]
162.1. Publication, etc., of an intimate image without consent

(1) Everyone who knowingly publishes, distributes, transmits, sells, makes available or advertises an intimate image of a person knowing that the person depicted in the image did not give their consent to that conduct, or being reckless as to whether or not that person gave their consent to that conduct, is guilty

(a) of an indictable offence and liable to imprisonment for a term of not more than five years; or

(b) of an offence punishable on summary conviction


Definition of an intimate image

(2) In this section, intimate image means a visual recording of a person made by any means including a photographic, film or video recording,

(a) in which the person is nude, is exposing his or her genital organs or anal region or her breasts or is engaged in explicit sexual activity;

(b) in respect of which, at the time of the recording, there were circumstances that gave rise to a reasonable expectation of privacy; and

(c) in respect of which the person depicted retains a reasonable expectation of privacy at the time the offence is committed.

In the news
"Clamato" juice producer Duffy-Mott defends its trade-secret recipe
Red caesar cocktail with ice, a salted rim, and a piece of celery for garnish.
In the 1999, Duffy-Mott, the producer of "Clamato" juice – commonly used in the famous Caesar cocktail – defended its trade-secret recipe at the Supreme Court of Canada.[37][38] The defendant used confidential information divulged by Duffy-Mott as part of previous business dealings to formulate a competitive product similar to the defendants', with the Court awarding damages to the plaintiff for this breach of confidence.[37][38]

Remedies

A sui generis action

The Supreme Court of Canada in LAC Minerals and Cadbury Schweppes stated that a breach of confidence is a sui generis action that can be grounded in contract, tort, or property law.[39][40] As such, Canadian courts have discretion to remedy a successful claim for breach of confidence with contractual, equitable, or proprietary remedies.[39][40] The jurisdictional basis (i.e. tort law, etc.) for a claim of breach of confidence is relevant insofar as it informs a court's determination of which type remedy is appropriate in the given circumstances.[41]

Injunctive relief

The Supreme Court of Canada in Cadbury Schweppes explained that injunctive relief will only be granted when damages are not an appropriate remedy in the circumstances.[42] The Court outlined three factors that will limit the availability of injunctive relief: 1) a delay in the claimant asserting their legal rights; 2) the confidential information is considered to be "nothing special"; and 3) the loss can be adequately remedied by financial compensation.[42] The Supreme Court of Canada rejected the notion that "nothing special" confidential information can enjoy permanent protection via injunction, stating that such a remedy would disproportionately favour the plaintiff's rights to the confidential information over the defendant's right to free market competition.[43]

The British Columbia Court of Appeal, in XY, LLC v. Zhu, stated that contractual terms will be relevant to the availability of any claim, and/or remedy, for breach of confidence.[10] The Court also stated that injunctive relief may be more likely to be granted when the terms specifying the confidential information protected are clearly defined and not over broad.[17] In this judgment, however, the Court was careful in limiting the scope of the permanent injunction, striking out portions of the trial judge's order which precluded the defendant from independently pursuing business in the same niche as the plaintiff.[44]

The British Columbia Court of Appeal's judgement in XY, LLC v. Zhu reflects a careful balance between the plaintiff's contractual rights to limit the misuse of information disclosed in confidence and the defendant's right to freely compete within the market independent of reliance on such confidential research.[44]

Damages

Equitable damages may be awarded based on the lost opportunity (i.e. economic advantage) a plaintiff would have enjoyed "but for" the breach of confidence.[45] The Supreme Court of Canada in Cadbury Schweppes stated that a "flexible and imaginative approach will often be required when calculating equitable damages in complex commercial settings.[46]

Damages may be awarded based on lost profits, with consideration to market factors, when the confidential information is considered "nothing very special" (i.e. could have been obtained by employing a competent consultant).[47][48] Alternatively, if the confidential information is considered "something special" (i.e. involved inventive prowess), damages may be awarded based on the market value of the information.[49] Finally, if the confidential information is considered "very special indeed", damages may be awarded based on a lump sum calculated with reference to the remuneration the plaintiff would have received from royalty fees.[49]

Proprietary remedies

Given that courts are afforded flexibility in the choice of remedy granted to a plaintiff once they have established a breach of confidence, proprietary remedies may be granted if appropriate.[50] In LAC Minerals, the Supreme Court of Canada explained that the breach of confidence action is focused on protecting the confidential relationship, not the plaintiff's proprietary interest in the confidential information.[51] However, La Forest J, speaking for the majority, stated that demonstrating a proprietary right in the information is irrelevant to the determination of whether a constructive trust is an adequate remedy in the circumstances.[52]

The majority stated that, in a vast majority of cases, even when a restitutionary claim is made out based on the defendant's unjust enrichment flowing from the misuse of the confidential information a constructive trust will not be awarded.[53] A constructive trust will, however, be awarded in cases where there are reasons to grant the plaintiff the additional proprietary rights flowing from a constructive trust, such as the uniqueness of the property obtained through the breach of confidence.[54] That was the case in LAC where the defendant misused confidential information disclosed by the plaintiff to acquire a unique property that the plaintiff would have otherwise acquired but for the breach.[55] Elsewise, when a restitutionary claim is established a monetary proprietary remedy will be granted.[50]

Discussion questions

  • What private right does the tort of breach of confidence vindicate? Is a contractual relationship a necessary prerequisite for pleading the tort?
  • What is it about the elements of breach of confidence that make it generally ill-suited to redressing victims of non-consensual intimate image distribution?
  • What did the Supreme Court of Canada mean when describing the breach of confidence action as sui generis in LAC Minerals[40] and, subsequently, Cadbury Schweppes[39]?


  1. ↑ Campbell v. MGN Ltd., [2004] UKHL 22 at para 13.
  2. ↑ Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at para 20.
  3. ↑ 3.0 3.1 Campbell v. MGN Ltd., [2004] UKHL 22 at para 14.
  4. ↑ Vidal-Hall v. Google Inc, [2014] EWHC 13 (QB) at para 52.
  5. ↑ Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at para 19.
  6. ↑ 6.0 6.1 XY, LLC v. Zhu, [2013] BCCA 352 (§10.5.1) at para 19, citing XY, LLC v. Zhu, [2012] BCSC 319 at para 202.
  7. ↑ Hutton v. Canadian Broadcasting Corp, 1992 ABCA 39 at para 15, citing LAC Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC).
  8. ↑ Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at paras 41–43.
  9. ↑ Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at paras 36–37.
  10. ↑ 10.0 10.1 10.2 XY, LLC v. Zhu, [2013] BCCA 352 (§10.5.1) at para 106.
  11. ↑ 11.0 11.1 Campbell v. MGN Ltd., [2004] UKHL 22 at para 13.
  12. ↑ Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at para 19.
  13. ↑ Hutton v. Canadian Broadcasting Corp, 1992 ABCA 39 at para 15, citing LAC Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC).
  14. ↑ 14.0 14.1 LAC Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC) at 610, citing Saltman Engineering Co. v. Campbell Engineering Co., (1948) 65 RPC 203.
  15. ↑ LAC Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC) at 610, citing Seager & Copydex Ltd., [1967] 1 WLR 923.
  16. ↑ XY, LLC v. Zhu, [2013] BCCA 352 (§10.5.1) at para 19, citing Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at para 36.
  17. ↑ 17.0 17.1 XY, LLC v. Zhu, [2013] BCCA 352 (§10.5.1) at paras 106–114.
  18. ↑ Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at para 32.
  19. ↑ 19.0 19.1 19.2 19.3 ES v. Shillington, 2021 ABQB 739 (§10.5.2) at paras 82–83.
  20. ↑ ES v. Shillington, 2021 ABQB 739 (§10.5.2) at paras 46, 82.
  21. ↑ 21.0 21.1 ES v. Shillington, 2021 ABQB 739 (§10.5.2) at paras 45–46.
  22. ↑ 22.0 22.1 ES v. Shillington, 2021 ABQB 739 (§10.5.2) at para 45, citing Jane Doe 72511 v. Morgan, 2018 ONSC 6607.
  23. ↑ Vidal-Hall v. Google Inc, [2014] EWHC 13 (QB) at paras 66–67.
  24. ↑ OBG v. Allan, [2007] UKHL 21 at para 255.
  25. ↑ 25.0 25.1 Campbell v. MGN Ltd., [2004] UKHL 22 at paras 13–14.
  26. ↑ ES v. Shillington, 2021 ABQB 739 (§10.5.2) at paras 46, 63, 67.
  27. ↑ Malone, Matt (2021). "On the (Data) Breach of Confidence". Alberta L Rev. 58 (4): 947.
  28. ↑ Tucci v. Peoples Trust Company, 2020 BCCA 246 at paras 110–113.
  29. ↑ 29.0 29.1 Tucci v. Peoples Trust Company, 2020 BCCA 246 at para 113.
  30. ↑ Malone, Matt (2021). "On the (Data) Breach of Confidence". Alberta L Rev. 58 (4): 948.
  31. ↑ Lawson Insight Podcast, "Protecting private information in Alberta" (Dec 20, 2021).
  32. ↑ Turcotte, Éric (2024). "Non-Consensual Distribution of Intimate Images: Diverging Approaches to Remedies in the Prairie Provinces". Saskatchewan L Rev. 87 (1): 67.
  33. ↑ ES v. Shillington, 2021 ABQB 739 (§10.5.2) at para 46.
  34. ↑ Turcotte, Éric (2024). "Non-Consensual Distribution of Intimate Images: Diverging Approaches to Remedies in the Prairie Provinces". Saskatchewan L Rev. 87 (1): 69.
  35. ↑ ES v. Shillington, 2021 ABQB 739 (§10.5.2) at para 45, citing Jane Doe 464533 v. D(N), 2016 ONSC 541.
  36. ↑ Criminal Code, RSC, 1985, c C-46, s 162.1.
  37. ↑ 37.0 37.1 Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at para 1.
  38. ↑ 38.0 38.1 Cheung, Cheryl (24 April, 2013). "A Leading Canadian IP Case: Juicing Up The Law Of Trade Secrets". Deeth Williams Wall. Check date values in: |date= (help)
  39. ↑ 39.0 39.1 39.2 Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at paras 20–28.
  40. ↑ 40.0 40.1 40.2 LAC Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC) at 615.
  41. ↑ Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at para 26, citing LAC Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC) at 615.
  42. ↑ 42.0 42.1 Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at para 78.
  43. ↑ Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at paras 86–88.
  44. ↑ 44.0 44.1 XY, LLC v. Zhu, [2013] BCCA 352 (§10.5.1) at para 114.
  45. ↑ Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at para 74.
  46. ↑ Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at para 99.
  47. ↑ Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at paras 65–66, citing Seager v. Copydex Ltd. (No. 2), [1969] EWCA Civ J0311-1 at 719–720.
  48. ↑ Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at para 94.
  49. ↑ 49.0 49.1 Cadbury Schweppes Inc. v. FBI Foods Ltd., 1999 CanLII 705 (SCC) at para 65, citing Seager v. Copydex Ltd. (No. 2), [1969] EWCA Civ J0311-1 at 719–720.
  50. ↑ 50.0 50.1 LAC Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC) at 674.
  51. ↑ LAC Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC) at 657.
  52. ↑ LAC Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC) at 676–677.
  53. ↑ LAC Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC) at 674, 678.
  54. ↑ LAC Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC) at 678–679.
  55. ↑ LAC Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC) at 678.
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