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Court Of Appeal Upholds Coverage Denial For Intrusion Upon Seclusion – Personal Injury

In its recent decision of Demme v. Healthcare Insurance Reciprocal of
1, the Court of Appeal addressed the
commercial liability insurer’s duty to defend actions based on
the tort of intrusion upon seclusion against an employee of the
insured, ultimately affirming the insurer’s denial of coverage
under the responding policy.

The plaintiff, Catharina Demme, a former registered nurse,
commenced the action against the insurer, the Healthcare Insurance
Reciprocal of Canada (“HIROC”) after HIROC denied her
request for coverage in respect of eight underlying actions
advanced against Ms. Demme and her employer, the Brampton Civil
Hospital (“the underlying actions”). The underlying
actions were commenced as result of Ms. Demme having accessed over
11,000 patients’ medical records over the course of 2006 to
2016 in order to wrongfully access an automatic medication
dispensing unit to obtain approximately 24,000 Percocet

With respect to the underlying actions against Ms. Demme,
similar, but not identical, allegations were made against her in
each action. All pleaded claims for the tort of intrusion upon
seclusion, though some included additional causes of action in
negligence, breach of statutory provisions, breach of fiduciary
duty, and negligent infliction of mental and emotional

In the action against HIROC, Ms. Demme brought a summary
judgment motion with respect to her claims for a defence and
coverage in the underlying actions under the responding HIROC
policy. The motion was dismissed, prompting the appeal to the Court
of Appeal.

Summary Judgment Motion

On Ms. Demme’s motion for summary judgment in her action
against HIROC, HIROC’s position grounding its denial of a
defence to Ms. Demme in the underlying actions was two-fold.

First, HIROC contended that the allegations in the underlying
actions did not amount to an “occurrence” under the
policy, which was defined in the policy as an “…accident,
including continuous or repeated exposure to substantially the same
general conditions, which result in bodily injury or property
damage neither expected nor intended from the standpoint of the
Insured.” HIROC’s rationale was that the bodily injury
arising from Ms. Demme’s conduct was “expected or
intended” by her.

Alternatively, HIROC contended that the allegations in the
underlying actions fell within an intentional act exclusion in the

Second, HIROC contended that the allegations against Ms. Demme
in the underlying actions amounted to performance of a criminal
act, thus falling within a criminal act exclusion in the

The motion judge accepted HIROC’s position, concluding that
there was no possibility that the claims against Ms. Demme for
intrusion upon seclusion, being the true nature of the claims
against her, could fall within the insuring agreement. The judge
agreed that the injuries alleged in the underlying actions were not
caused by an “occurrence”, as defined in the policy,
because they were not unexpected or unintended on her part.

Further, the judge concluded that the claims advanced in the
underlying actions fell within both the intentional act exclusion
and the criminal act exclusion, as argued by HIROC.


The Court of Appeal framed four issues raised by Ms. Demme on
her appeal.

First, the Court considered whether the motion judge misapplied
the pleadings rule, which governs the duty to defend analysis, and
the three-step process developed in the jurisprudence with respect
to its application, namely:

  1. reviewing the pleadings to determine the true nature of the
    claims properly pleaded;

  2. considering whether any claims are wholly derivative in nature;

  3. considering whether any of the properly pleaded, non-derivative
    claims could potentially trigger the insurer’s duty to

While the Court noted that the usual duty to defend analysis
considers the allegations pleaded in the statement of claim against
the insured, it recognized that other pleadings may be considered
as well as part of the analysis. However, the greatest weight must
be given to the statement of claim against the insured.

Nevertheless, defence pleadings that include admissions of fact
can be considered. The motion judge’s analysis was accordingly
grounded in the statements of claim in the underlying actions, as
well as Ms. Demme’s statements of defence.

Ms. Demme argued on appeal that the motion judge failed to give
sufficient weight to two sets of facts pleaded in her statements of
defence to the underlying actions when determining whether there
was a “mere possibility” that a pleaded claim could
trigger coverage under the policy.

The first set of facts relied on by Ms. Demme was her pleading
that at all relevant times, Ms. Demme was suffering from a
painkiller addiction due to chronic hip and knee pain. The second
set of facts was that the intended target of her actions was the
Percocet medication, not the information of the patients in the
medical records she accessed.

The Court of Appeal did not accept that argument. The Court
noted that those explanations or justifications by the plaintiff
were not ignored by the motion judge, but understandably did not
play a part in his analysis, which properly focused on the nature
of the claim asserted against Ms. Demme and the terms of coverage
provided by the policy.

The Court then considered Ms. Demme’s second ground of
appeal, whether the motion judge erred in his treatment of the
intentionality issue in respect of coverage for an
“occurrence” and the intentional act exclusion.

In this regard, Ms. Demme argued that the motion judge failed to
follow the Court of Appeal’s decision in Oliveira v. Aviva
Canada Inc.
2 She contended that this decision was
binding authority for the proposition that “where a
hospital’s insurance provides coverage for claims of
‘invasion or violation of the right of privacy,’ actions
against a hospital employee for unlawfully accessing patient
records and information involve the sort of conduct the policy was
intended to cover and respond to.”

The Court rejected this argument, noting that the focus in
Oliveira was on whether or not the employee nurse was an
additional insured under the policy. That consideration is a
separate issue from whether any policy definition of
“occurrence” or intentional act exclusion may preclude
coverage for and any duty to defend claims alleging intrusion upon
seclusion against the nurse.

Ms. Demme also argued that the tort of intrusion upon seclusion
encompasses not only intentional conduct, but also reckless
conduct. As such, she argued that the motion judge had erred in
failing to find a mere possibility that the claims against her in
the underlying actions could be regarded as claims for damages
bodily injury arising out of reckless rather than intentional
conduct, which could bring such claims within the definition of
“occurrence” in the policy, and remove them from the
ambit of the intentional act exclusion.

The Court was not persuaded by this submission, finding that the
discussion in Jones v. Tsige3 established the
tort of intrusion upon seclusion did not support the proposition
that a reckless act in the context of the tort equated to
unintentional conduct. Rather, Jones placed reckless
conduct on par with intention or deliberate conduct.

Ms. Demme also asserted that intrusion into patient medical
records was simply an unintended consequence of her intentional
conduct to obtain the Percocet pills, and those unintended
consequences amounted to bodily injury that fell within the policy
definition of “occurrence” and outside the scope of the
intentional act exclusion.

The Court did not give effect to this argument either, however,
noting that the relevant intention with respect to the tort of
intrusion upon seclusion in this case is the intention to access
private medical records, which, if demonstrated, amounts to an
intention to cause the injury of the patients’ loss of control
over their private information.

Given the Court’s conclusions on the second ground of
appeal, that the motion judge did not err in concluding that the
claims in the underlying actions were not “occurrences”
and were subject to the intentional act exclusion, the Court did
not comment on Ms. Demme’s this ground of appeal, the motion
judge’s treatment of the criminal act exclusion.

Finally, Ms. Demme contended that by the motion judge concluding
as he did, he erroneously adopted an interpretation of the policy
that nullified coverage for liability for bodily injury arising
from “invasion or violation of the right of privacy,”
thereby offending the principle that courts should avoid a policy
interpretation that would render obtained insurance null, and would
enable the insurer “to pocket the premium without

The Court, however, was not convinced by this submission. The
Court noted that since the policy would cover negligence-based
invasions of privacy, the lack of coverage for intentional
intrusion upon seclusion would not nullify coverage under the

Accordingly, the Court dismissed Ms. Demme’s appeal, fixing
costs in favour of HIROC in the amount of $15,000


1. 2022 ONCA 503.

2. 2018 ONCA 321.

3. 2012 ONCA 32.

Rogers Partners LLP is an experienced civil litigation firm in
Toronto, Ontario. The firm represents insurers and self-insured
companies in numerous areas, including motor vehicle negligence,
occupiers’ liability, product liability, professional
negligence, construction claims, statutory accident benefits,
disability benefits, municipal liability, medical negligence,
sexual abuse, and insurance coverage disputes.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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