This past month, the Ontario Court of Appeal released its decision of Demme v. Healthcare Insurance Reciprocal of Canada (HIROC) 2022 ONCA 503, which considered a commercial liability insurer's duty to defend in actions based on the tort of intrusion upon seclusion. Justice Brown ultimately found that the insurer had a right to deny coverage to an employee of the insured under its policy.

The appellant was a former nurse whose employment was terminated after it was discovered she was misusing patient records and the automatic dispensing unit to wrongfully access tens of thousands of pain medication pills. After notifying 11,358 patients whose records were affected, eight civil actions were commenced by these patients against the appellant and the hospital. The respondent insurer, HIROC, informed the former nurse that there was no insurance coverage available to defend her. The appellant moved for a summary judgment declaring HIROC owed her a duty to defend. The motion judge dismissed the motion, which was subsequently appealed.

Many of the underlying actions included only allegations related to intrusion upon seclusion as against the appellant. In denying her coverage, HIROC argued that the claim did not arise out of an "occurrence" as defined in the insurance policy. Rather, the action involved claims for bodily injuries which were expected or intended by the appellant. This constituted an exclusion under the policy, in addition to further applicable exclusion for alleged criminal acts.

The lower court found that intrusion upon seclusion was, of necessity, an intentional act and therefore subject to the exception under the policy. It further found that even the allegations of "negligence" in some of the underlying claims were simply derivations of the allegations of intrusion upon seclusion. For those reasons, HIROC was justified in denying coverage.

On appeal, the Court of Appeal found that the summary judgment motion judge had correctly applied the "pleadings rule." Under the duty to defend, the analysis should focus on the nature of the claims alleged within the Statement of Claim – i.e. intrusion upon seclusion – rather than the appellant's pleaded explanations for her actions.

The appellant further argued that the motion judge erred and that the tort of intrusion upon seclusion includes the possibility of unintentional conduct that could arise from an "occurrence." However, in outlining the elements of the tort, the Court of Appeal rejected this argument. It determined that intrusion upon seclusion necessarily involves reckless, deliberate conduct that amounts to numerous intrusions of privacy. Furthermore, as the definition of 'reckless' within the context of this tort cannot be regarded as accidental and stands side-by-side with intentional conduct. Where a party performs an act where some form of injury is not only foreseen but also near-certain, it cannot be described as an accident or unintentional. Recklessness was seen by the court as very close to intentional on the spectrum of conduct. The relevant intention in this case was to access the private patient records, which amounted to both an intention and likelihood to cause injury due to a loss of control over private information.

Finally, the appellant argued that the motion judge had adopted an interpretation of HIROC's policy that nullified coverage for liability for bodily injury arising from an "invasion or violation of the right of privacy." This would offend the policy principle as the insurer would be able to obtain premiums without any risk. Justice Brown was not convinced by this argument, as he contended that the policy would still cover negligence-based invasions of privacy, even if it does not provide coverage for intrusion upon seclusion.

The tort of intrusion upon seclusion is relatively young in the context of Ontario jurisprudence, with its limits still being explored and restrained by the courts. In particular, the question of where it falls in the context of insurance coverage for claims limited to that tort remain vague. By isolating the analysis to the true nature of the tort, the Court of Appeal makes clear that "accidental" intrusion upon seclusion is an oxymoron. The tort itself now unequivocally involves intentional conduct at its core which will be relevant not only to insurers testing whether a given claim falls within the scope of coverage but also for determining what sort of conduct will satisfy the test for this tort at trial. This case serves as an important signal to insurers that under the appropriate conditions and with certain exceptions in place within their policies, they may not be required to defend policyholders against the tort of intrusion upon seclusion.