Kugler v Newman, 2017 ABQB 536

Court of Queen’s Bench of Alberta Citation: Kugler v Newman, 2017 ABQB 536 Date: 20170905 Docket: 1501 00537 Registry: Calgary Between: Wilfried Kugler Plaintiff - and - Robert Newman and Moore's Industrial Service Ltd. Defendants _______________________________________________________ Reasons for Judgment of J.T. Prowse , Q.C., Master in Chambers _______________________________________________________ [ 1 ] The plaintiff Wilfried Kugler was employed by the defendant Moore’s Industrial Service Ltd. (“Moore’s”).

His employment was terminated in August of 2009. [ 2 ] Due to the termination of his employment he returned to Moore’s a laptop computer, owned by Moore’s, which he had been allowed to use. [ 3 ] Kugler sued Moore’s for wrongful dismissal. He settled his claim in March of 2010. Moore’s paid him a large settlement amount and he signed a release. [ 4 ] Then an employee of Moore’s, the defendant Robert Newman, used information on the returned laptop to access Kugler’s

personal information, including accessing Kugler’s gmail account. [ 5 ] After discovering the breach of privacy, Kugler filed a complaint with the Office of the Information and Privacy Commissioner of Alberta, which issued an order under

section 52 of the Personal Information and Privacy Act (“PIPA”), S.A. 2003, c. P-6.5 on November 29, 2013 finding that Moore’s had violated Kruger’s privacy rights. [ 6 ] Kugler then commenced these proceedings against Moore’s and Newman pursuant to

section 60 of PIPA, which states: 60(1) If the Commissioner has made an order under

section 52 against an organization and the order has become final as a result of there being no further right of appeal, an individual affected by the order has a cause of action against the organization for damages for loss or injury that the individual has suffered as a result of the breach by the organization of obligations under this Act or the regulations. [ 7 ] The defendants apply to summarily dismiss Kugler’s claim on the basis that it is barred by the release which Kugler signed in March of 2010, or alternatively is barred by the Limitations Act , R.S.A. 2000, c.L-12..

Alternatively, the defendants seek security for costs from Kugler. Newman has an additional application that the action be summarily dismissed against him because the statutory action, if any, exists against Moore’s only. [ 8 ] Following argument on August 30, 2017, I delivered my decision with these written reasons to follow. My decision was: • Kugler’s action is summarily dismissed against Newman; • Moore’s application for

summary dismissal is rejected; • Kugler need not post security for costs; • Given the mixed success, neither side would be awarded costs of the applications.

Is Kugler’s claim barred by the release which he signed? [ 9 ] As mentioned, the defendants violated Kruger’s privacy rights after the date of the release, which was March 4, 2010. [ 10 ] In my view, Kugler has a very arguable position that the release is limited to “any matter up to the date of this release” and therefore does not apply to privacy violations which occurred after March 4, 2010. [ 11 ] Even if that argument fails, Kruger has another (perhaps weaker) argument that his current claim is not a claim “arising out of or in any way connected with [his] employment”. [ 12 ] In other words, it is far from certain that Kugler’s claim is barred by the release which he earlier signed, and therefore this is not an issue suitable for

summary determination in favour of the defendants. Is Kugler’s claim barred by the Limitations Act ? [ 13 ] As mentioned, the Privacy Commissioner issued a report under

section 52 of PIPA on November 29, 2013, which held that Kugler’s privacy rights had been violated by Moore’s. [ 14 ] This action was commenced approximately 14 months later. [ 15 ] The defendants assert that they are entitled to immunity pursuant to the Limitations Act because Kugler became aware of the privacy violation more than 2 years earlier, in October of 2010. [ 16 ] If one were to accept the defendants’ argument, then Kugler’s limitation period would have elapsed two years after Kugler learned of the privacy violation, in other words it would have elapsed in October of 2012, which is actually before the statutory cause of action arose in November of 2013 (in fact, the cause of action arose even later, when the

section 52 order became final). [ 17 ] Clearly Kugler’s cause of action first arose sometime after November 29, 2013 and the current action was commenced well within the time allowed by the Limitations Act . [ 18 ] Accordingly I decline to dismiss Kugler’s action based on the limitations argument advanced by the defendants. In other words, the defendants are not entitled to immunity from liability pursuant to the Limitations Act . Kugler’s claim against Newman [ 19 ] As stated, Kugler’s claim against both Moore’s and Newman is based on

section 60 of PIPA, quoted above. [ 20 ]

Section 60 gives a statutory cause of action against ‘the organization’ which in this case is Moore’s and not Newman. [ 21 ] Counsel for the plaintiff argued that Newman himself might be considered an ‘organization’ under the definition contained in

section 1(

i) of PIPA, as follows: (i) “organization” includes (

i) a corporation, (ii) an unincorporated association,

(iii) a trade union as defined in the Labour Relations Code, (iv) a partnership as defined in the Partnership Act, and (

v) an individual acting in a commercial capacity , but does not include an individual acting in a personal or domestic capacity; (emphasis added) [ 22 ] While the plaintiff might have had an argument that Newman falls under the portion of the definition underlined above (and I do not comment on the merits of that argument), this argument should have been made to the Commissioner who made the order of November 29, 2013, because it is clear, in that order, that it is Moore’s which was held to be the ‘organization’. Therefore the statutory cause of action set out in

section 60 of PIPA arises only against Moore’s and not Newman. Security for costs [ 23 ] The factors which are to be considered when security for costs is sought are set out in Rule 4.22 of the Rules of Court as follows: The Court may order a party to provide security for payment of a costs award if the Court considers it just and reasonable to do so, taking into account all of the following: (

a) whether it is likely the applicant for the order will be able to enforce an order or judgment against assets in Alberta; (

b) the ability of the respondent to the application to pay the costs award; (

c) the merits of the action in which the application is filed; (

d) whether an order to give security for payment of a costs award would unduly prejudice the respondent’s ability to continue the action; (

e) any other matter the Court considers appropriate. [ 24 ] The defendants conceded during argument that there was no evidence to suggest that Kugler would be unable to pay any award of costs which might be made against him in these proceedings. Rather the defendants were relying on factor (

c) above, the merits of the action, and specifically that Kugler had not provided any evidence of ‘loss or injury’ as contemplated in

section 60. [ 25 ] There are two answers to the defendants’ argument: (

i) by far the most important factor in a security for costs application is whether the plaintiff will be able to pay costs which might be awarded against him. The ‘merits’ issue is a secondary consideration (ii) even though Kugler has not provided evidence of loss or injury, in the sense of specific monetary loss, in my view it is likely that he will be awarded some damages simply due to the violation of his privacy rights, without the need to establish specific monetary loss. The fact that his privacy rights were violated is res judicata under the order issued pursuant to

section 52 of PIPA. [ 26 ] Accordingly I decline to award security for costs. Heard on the 30 th day of August, 2017. Dated at the City of Calgary, Alberta this 5 th day of September, 2017. J.T. Prowse, Q.C. M.C.C.Q.B.A. Appearances: Mark A. Klassen The Law Offices of Mark A. Klassen

for the Plaintiff Mark Freeman Freeman Litigation for the Defendant