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Breach of the implied undertaking is not a tort

Breach of an implied undertaking is not in and of itself a tort:
 
The undertaking is not a contract or a promise to an opposite party, but rather an obligation to the court.  A breach of the undertaking is dealt with by the court within the context of the lawsuit in which the breach occurs.  Typically a breach of the undertaking will be dealt with as a contempt of court.  It may be that other remedies are possible; I do not express any conclusion on that.  What is clear, however, is that the breach does not in and of itself create a private law cause of action.
(McDaniel v. McDaniel, 2008 BCSC 653 at para. 33, var’d on other grounds 2009 BCCA 53).
 
However, if the act of disclosure of information subject to an implied undertaking forms the basis of a nominate tort, such as breach of confidence, then a tort may be committed in the course of disclosing that information: McDaniel v. McDaniel, 2008 BCSC 653 at para. 34, var’d on other grounds 2009 BCCA 53.
 
In McDaniel v. McDaniel, 2008 BCSC 653 the plaintiff sued his brother (Jack McDaniel) and the lawyer who had acted as defence counsel in a claim the plaintiff had previously brought against his disability insurer. In the course of defending the disability insurance claim the lawyer acquired information subject to an implied undertaking (medical information etc.). While that disability insurance litigation was ongoing the plaintiff’s brother phoned the lawyer acting for the insurance company and sought information related to the claim, but the lawyer declined to disclose information subject to the implied undertaking:
 
The evidence of Jack McDaniel and of Jo Ann Carmichael, including contemporaneous e-mails, establish that Ms. Carmichael was fastidious in refusing Jack McDaniel’s requests for information concerning Brian McDaniel’s condition.  It may be, however, that she did state that the insurer believed Brian McDaniel to be malingering and that she believed that Dr. Judith Allen would say anything that Brian McDaniel wanted her to say.
(McDaniel v. McDaniel, 2008 BCSC 653 at para. 38).
 
The court went on to consider whether the lawyer committed the tort of breach of confidence in telling Jack McDaniel what she did. Without discussing whether the information provided to Jack McDaniel was confidential, or whether it was communicated in confidence, the court held that the information was not misused by Jack McDaniel and so the tort of breach of confidence had not been committed. 
 
The test for establishing an actionable breach of confidence is described in Foreman v. Chambers, 2006 BCSC 1244 (CanLII), 2006 BCSC 1244, varied, without affecting this issue, at 2007 BCCA 409 (CanLII), 2007 BCCA 409.  At para. 56 Myers J. said:
The test for establishing an actionable breach of confidence is a three–part one.  The plaintiff must show that:
  • the information was confidential,
  • the information was communicated in confidence,
  • the information was misused by the party to whom it was communicated.
It does not appear to me that any part of this test is met in this case.  Clearly there is no evidence whatsoever that Jack McDaniel misused or even could have misused any of this information.  To the extent that any part of it could be said to have been confidential or communicated in confidence, it was of such little moment that it is obvious that Brian McDaniel could not have suffered any damage even if it had been used in some way by Jack McDaniel.
 
(McDaniel v. McDaniel, 2008 BCSC 653 at para. 38).
 
The above confirms that although breach of the implied undertaking is not itself a tort, another reason for lawyers to be cautious about disclosure of information subject to the implied undertaking is that they may commit torts such as breach of confidence by making disclosure.
 
 
 
This book was written by Michael Dew, a Vancouver lawyer who practices civil litigation, including representing claimants in motor vehicle accident claims, persons who have been denied insurance coverage by insurance companies, and persons dealing with builders lien issues.