Ontario court confirms new privacy tort

Earlier this year, the Ontario Court of Appeal in Jones v. Tsige, 2012 ONCA 32 confirmed the existence of a new tort of privacy, a cause of “action for intrusion upon seclusion”:

One who intentionally intrudes, physically or otherwise, upon the seclusion of another or his private affairs or concerns, is subject to liability to the other for invasion of his privacy, if the invasion would be highly offensive to a reasonable person.

The key features of this cause of action are:

  • the defendant’s conduct must be intentional, within includes reckless conduct;
  • the defendant must have invaded, without lawful justification, the plaintiff’s private affairs or concerns;
  • a reasonable person would regard the invasion as highly offensive causing distress, humiliation or anguish.

Proof of harm to a recognized economic interest is not required. However, given the intangible nature of the interest protected, damages for intrusion upon seclusion will ordinarily be modest.

The court also emphasized that the types of intrusions covered are to be decided objectively:

Claims from individuals who are sensitive or unusually concerned about their privacy are excluded: it is only intrusions into matters such as one’s financial or health records, sexual practices and orientation, employment, diary or private correspondence that, viewed objectively on the reasonable person standard, can be described as highly offensive.

This new development in tort law is welcome as previous cases were unclear whether a tort of privacy actually exists in Ontario. Businesses which keep financial or health records should make their employees aware that such a tort of privacy exists and should take steps to further protect their customers’ information.

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Setback for creation of Canada wide securities regulator

In the United States, the Securities and Exchange Commission (SEC) regulates capital markets, including the stock market throughout the entire country.

In Ontario, the Ontario Securities Commission regulates the Toronto Stock Exchange (TSX), while in BC the British Columbia Securities Commission regulates the Vancouver Stock Exchange (VSE). However, there is no single capital markets regulator covering all of Canada.

A nationwide regulator covering all of Canada would ensure that Canada’s financial markets are regulated with the same laws and enforced with the same rigor, fueling Canada’s economy and maintaining Canada’s financial stability. With that aim in mind, the federal government has been trying to create a nationwide securities regulator for Canada for some time, under its proposed Securities Act.  Unfortunately, the creation of a nationwide securities regulator was dealt a setback by the Supreme Court of Canada in the Reference re Securities Act released today.

The problem is that under the Canadian constitution, the federal government has a general power to regulate trade and commerce but each provincial government has the sole power to regulate matters over property and civil rights and matters of a local or private nature within their own province.  The Court held that as it is currently drafted, the proposed Act is not chiefly aimed at genuine federal concerns, but is principally directed at the day‑to‑day regulation of all aspects of securities and is thus unconstitutional.

The Court however recognized that there are specific aspects of the Act aimed at addressing matters of genuine national importance that is distinct from provincial concerns, including the management of systemic risk and national data collection, which the provinces, acting alone or in concert, lack the constitutional capacity to sustain a viable national scheme.

The next step for the federal government then would be to redraft the Securities Act taking into account the Supreme Court’s ruling, and hopefully reintroduce it later on in 2012.  A nationwide regulator is important for Canada as a whole, and the federal government should make it a priority in the new year.

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Buying a home in Canada from a non-resident seller

Many people own more than one piece of real estate.  Perhaps it’s a cottage, or a condo that was rented out for investment purposes.  In some cases, the owner may not even live in Canada anymore.

If you’re buying a home (or any real estate) in Canada from a seller who normally does not live in Canada (called a non-resident), you may be liable for additional taxes if you are not careful.  Under section 116 of the Income Tax Act of Canada, a buyer who buys Canadian property from a non-resident may be liable for up to 25% of the capital gains the non-resident seller made on the sale.

In such cases, the buyer must obtain a Clearance Certificate issued by the Canada Revenue Agency under section 116 to relieve them of this tax liability.  The process to obtain this certificate can be complex and must involve the seller’s lawyer and the seller’s accountant working together.  In some cases, CRA can take a few months to issue the certificate.  If you are a non-resident seller, or are buying property from a seller who normally does not live in Canada, consult your lawyer about the s. 116 clearance certificate process.

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Defamation and linking to defamatory materials

The Supreme Court today tackled the issue of whether a hyperlink linking to another web page with defamatory material is itself defamatory.  The Court concluded that the use of a hyperlink to link to another page with defamatory material is not itself defamatory.

In Crookes v. Newton, 2011 SCC 47, the defendant Newton had posted material on his website linking to other websites that contained defamatory material about the plaintiff Crookes. Crookes sued Newton on the basis that two of the links he created connected to defamatory material, and that by using those hyperlinks, Mr. Newton was publishing the defamatory information.

The Court concluded that:

 Making reference to the existence and/or location of content by hyperlink or otherwise, without more, is not publication of that content.  Only when a hyperlinker presents content from the hyperlinked material in a way that actually repeats the defamatory content, should that content be considered to be “published” by the hyperlinker.

[…]

[…] the use of a hyperlink cannot, by itself, amount to publication even if the hyperlink is followed and the defamatory content is accessed […]

As the plaintiff in a defamation suit must prove on that the defamatory words were “published”, the use of a hyperlink to defamatory material, without more, is not defamatory.

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Status certificates are an essential resource when buying a condo

You’re all excited because you’ve just brought a condo in the city that you love. Whether it’s your first place or an investment property, when buying a condominium there are some special things to always keep in mind amidst all the excitement.

An important thing to keep in mind when buying a condo, especially a resale condo, is that you’re not just buying the condo unit itself – you’re also buying a share of the entire building, including all its assets and liabilities. As such, the financial and legal health of the condo corporation is very important and should be taken into account when deciding whether to buy that condo you just saw or not.

A client found out first hand when she brought a condo this spring. The condo was in dream location downtown, within easy walking distance to Queen’s Park. It wasn’t a new condo, but the building looked well maintained, and the unit itself had a spectacular view of the downtown skyline. She made an offer for the condo, and to her delight, it was accepted. She just brought her dream home!

Amidst the euphoria of buying a new place, she also did something very smart. She had me review the Agreement of Purchase and Sale before she put in the offer, and I advised her that she should put in a condition for her lawyer to review the condo’s status certificate and to be satisfied with it if the deal is to go through.

A status certificate is a report on the financial and legal health of the condominium corporation. Anyone can request a status certificate from the condo management office as long as they pay a $100 fee. A status certificate can reveal many things, for example:

  • upcoming major projects, for example installing new elevators or new exterior windows, which may result in an increase in management fees
  • pending legal action against the condo corporation, which may result in the condo corporation requiring management fee increases in order to pay a legal settlement
  • unpaid condo management fees by the seller
  • potential problems with non-standard improvements made to the condo by the seller

As this client found out, having me review the status certificate for a condo paid off. She found out that the condo corporation was planning to undertake a major rooftop renovation, which would result in an increase in her condo management fees of about $100 a month. With this information in hand, she was able to renegotiate a lower purchase price for the condo.

By having me review the status certificate to spot potential problems, she avoided any surprises when she moved into her dream home.

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BC court confirms website terms of use enforceable as legal contracts

In Century 21 Canada Limited Partnership v. Rogers Communications Inc., 2011 BCSC 1196, the BC Court held that Rogers infringed Century 21’s copyright and terms of use by scraping Century 21’s real estate listings from its website and incorporating the listings into the real estate search engine Zoocasa.

Starting in 2008, Zoocasa copied photos, property listings, and pricing from Century 21’s website and provided hyperlinks that directed a user to specific pages of the Century 21 Website that contained the property listings.  Despite letters from Century 21, Zoocasa chose not to stop scraping until early 2010, nearly 2 and a half years after Century 21 first advised Zoocasa they did not consent to Zoocasa’s activities and advised them of the Century 21 Terms of Use and Zoocasa’s breach of these terms.

The court considered the enforceability of website terms of use as a contract, and explored various analogous software licences and contracts created over the Internet such as shrink wrap agreements, click wrap agreements, and browse wrap agreements.  The court confirms that website terms of use are enforceable as legal contracts at para 119:

The act of browsing past the initial page of the website or searching the site is conduct indicating agreement with the Terms of Use if those terms are provided with sufficient notice, are available for review prior to acceptance, and clearly state that proceeding further is acceptance of the terms.

In addition, the court confirms that liability is not avoided by automating the website scraping as the scraping program must initially be set up manually.

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What can a lawyer do for me as a homebuyer?

Whether you’re a first time homebuyer or a seasoned homeowner looking to move into a new house, it’s always recommended that you retain a lawyer to help you make sure the transaction goes as smoothly as possible.

A real estate lawyer can help:

  • Advise and explain the Agreement of Purchase and Sale and what it means in relation to your rights as a homebuyer
  • Ensure clear title to the house you’re buying, so that you’re actually buying the house that you think you’re buying and that there are no problems with the title to the house that may expose you to litigation or other hazards in the future
  • Ensure compliance with municipal bylaws, zoning requirements, and all required building and fire codes – especially important for buyers who intend to rent out a basement apartment for example
  • Draft and take care of all paperwork in relation to the real estate transaction, including the deed, mortgage and lending documents with your lender, the bill of sale for chattels, residency declarations, and more
  • Advise on tax matters related to the real estate transaction, including the Ontario Land Transfer Tax, the Toronto Land Transfer Tax, and the Harmonized Sales Tax (HST/GST)
  • Advise on federal and provincial incentives and rebates for new and existing homeowners
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Changes to rules regarding .ca domain disputes

The Canadian Internet Registration Authority (CIRA) recently announced changes to the CIRA Domain Name Dispute Resolution Policy (CDRP). The CDRP, which governs disputes over .ca domain names alleged to be registered in bad faith, has been in effect since 2002.

Some of the changes include:

  • Bad Faith “Legitimate Interest Factors” are now Non-Exhaustive.
  • Bad Faith Factor of Commercial Gain Added.
  • Electronic Filing of complaints and respondent submissions.
  • Separation of Filing Fees from Panellist Fees.
    • “Previously, Complainants were required to pay the entire $4,000 filing fee upon filing a CDRP complaint. Under the revised CDRP Rules, Complainants are now only required to pay the Dispute Resolution Provider fee of $1,000 to file a complaint.”

The revised CDRP rules come into effect August 22, 2011.

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US patent system moves to first-to-file

Today, H.R. 1249, the America Invents Act, passed the US House of Representatives. The US Senate had passed a similar bill (S. 23) in March.

The pair of bills have some differences between them that needs to be resolved, but together they present a broad change to the way the US patent system works.

Currently, the US remains one of the few countries in the world where patents are awarded based on whoever first invents a claimed invention. This is called “first-to-invent” and has created an environment where there is a lack of incentive for inventors to file patents. Encouraging inventors to file patents and disclose their invention to the public in return for a time-limited monopoly is a policy objective of patent law, since the advancement of science relies on building upon what is already known. As Isaac Newton once said, “If I have seen further it is only by standing on the shoulders of giants”.

With the new reforms, the US moves to a “first-to-file” system in which a patent is awarded to the inventor who files for a patent first.  This provides an incentive for inventors to file patents as soon as they make an invention in order to prevent any subsequent person who independently makes the same invention from acquiring patent rights.

Canada already uses the “first-to-file” system, and has been using such a system since 1989.

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The drive to determine what is patentable

Last week, the U.S. Supreme Court agreed to hear an appeal of Mayo Collaborative Services v. Prometheus Laboratories, Inc., on the issue of whether or not methods of medical diagnosis are patentable in the US.

Closer to home, tomorrow is the appeal hearing for Amazon v. Canada, Federal Court File A-435-10, in which Amazon seeks to have the Court of Appeal confirm that methods of doing business (such as a method of doing “1-click” shopping online in this case) are patentable in Canada. We should see a decision from the Court within a year.

These are exciting times for the patent bar as well as for scientists worldwide, as these decisions can affect many companies’ R&D directions in the coming years.

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