BC Court Dismisses Appeal in Privacy Law Case

The British Columbia Court of Appeal has dismissed as moot an appeal from the Supreme Court in Simon Fraser University v. British Columbia (Information and Privacy Commissioner).

The dismissal of the appeal confirms the decision of the Supreme Court setting aside the order of the Information and Privacy Commissioner's Delegate who found that records held by SFUniventures were under the control of SFU, the sole shareholder of SFUniventures, and therefore subject to the access provisions of the B.C. Freedom of Information and Protection of Privacy Act (“FIPPA”). The Supreme Court held that the Delegate was wrong in ignoring the separate legal existence of SFUniventures in concluding that the records were under the control of SFU and therefore within the scope of FIPPA.

The Supreme Court also found that the Delegate erred by finding that the records held by SFUniventures could be subject both to FIPPA and to the B.C. Personal Information Protection Act (“PIPA”), which governs private sector organizations.

The appeal was rendered moot after the death of the appellant and applicant for the records. On May 2, 2011, in an oral decision from the bench, the B.C. Court of Appeal dismissed two applications to substitute a new appellant for the deceased appellant and dismissed the appeal with written reasons to follow.

The records sought by the applicant were held by SFUniventures, a holding company used by SFU to invest in commercial ventures arising from university research. Under the terms of a service contract, SFU provided administrative support to SFUniventures in the University/Industry Liaison Office. The Delegate acknowledged that the inclusion of corporations owned or controlled by local government bodies within the definition of “local government body” under FIPPA signalled that the legislature did not intend to include under FIPPA corporations owned or controlled by other classes of public bodies, including educational bodies such as universities. However, the Delegate found that it was appropriate to ignore the separate legal existence of SFUniventures for the purposes of FIPPA because it did not have a “real independent existence or autonomy” from SFU.

The Delegate based this conclusion on SFU's sole ownership of SFUniventures, the appointment of SFU employees as Directors of SFUniventures, SFUniventure's lack of an independent location or staff, and SFUniventures being governed under the direction of SFU in order to promote SFU's interests.

The Supreme Court cited common law authorities upholding the legal distinction between shareholders and wholly owned or closely held corporations and held that the Delegate had not applied the proper common law test to “pierce the corporate veil” and ignore the separate legal status of SFUniventures.

The Court further held that SFUniventures, as a corporation, was subject to PIPA, and that it was inappropriate for the Delegate to find that the records of SFUniventures could be both under the control of SFU and therefore subject to FIPPA, and under the control of SFUniventures and therefore subject to PIPA.

The Supreme Court set aside the Delegate's order.

This issue will likely be addressed again by the Information and Privacy Commissioner and possibly the courts in a review currently before the Commissioner involving a request for records held by corporations owned by the University of British Columbia.

The initial decision of the Commissioner's Delegate finding that the records were under the control of UBC and therefore subject to FIPPA was set aside by consent due to a breach of procedural fairness by the Delegate. It is expected that the re-hearing of that review will now proceed following the dismissal of the appeal in the SFU case.

The exclusion from FIPPA of corporations which are wholly owned or controlled by universities and other public bodies was addressed in the May 2010 Report of the Special Committee to Review FIPPA. The Committee recommended that the definition of “public body” in FIPPA be amended to include “corporations created or owned by a public body,” which is similar to the existing definition of “local government body” in FIPPA.

To date, the recommendations of the Special Committee have not been debated in the B.C. legislature.

Eileen Vanderburgh of Alexander Holburn Beaudin & Lang LLP acted for the respondent Simon Fraser University.

Leo McGrady, QC, of McGrady & Company acted for the appellants David Noble and the Canadian Association of University Teachers (CAUT).

Angela Westmacott of Lovett & Westmacott acted for the appellant the Office of the Information and Privacy Commissioner.

Geoffrey Cowper, QC, and Lorene Novakowski of Fasken Martineau DuMoulin LLP acted for the intervenor the University of British Columbia.

Daniel Burnett of Owen Bird Law Corporation acted for the British Columbia Freedom of Information and Privacy Commission before the Supreme Court only.

James Baugh of McGrady & Company acted for Dr. David Noble before the Supreme Court only.
Bruce Elwood of Arvay Finlay acted for CAUT before the Supreme Court only.