Author: Sarah Nadon - Law Student
Edited By: Ryan Carson
A breach of confidence can be detrimental to any business and it can occur at any time. In many commercial transactions, parties often share business information that is typically considered to be confidential before and during a transaction. The Supreme Court of Canada in Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] SCR 574, held that there are 3 requirements to demonstrate a breach of confidence has occurred.
In this case, Lac Minerals was a senior mining company, while Corona was a junior mining company. Together the mining companies were negotiating a joint mining exploitation venture. Discussions took place and various amounts of information was exchanged. Corona divulged its interest in a particular property. There was no discussion about confidentiality. Down the road, both parties bid on the property which was eventually sold to Lac Minerals. Corona had no idea that Lac Mineral was interested in the property. Finally, Corona sued Lac Mineral for a declaration that the land was in fact held in trust for Corona.
At the Supreme Court of Canada, the Court ruled in favour of Corona stating that Lac Mineral owed a duty of confidentiality to Corona with respect to the information that was shared during various conversations and exchanges.
The Supreme Court held that there are 3 requirements that show breach of confidence:
The information was in fact confidential;
The information must have been relayed in confidence; and
The person receiving the information must have misused the information to harm the other party.
In order for there to be a breach of confidence, there must be confidential information communicated to a second party who misuses the information. The information must be more than information that is readily provided to the public. If one can prove that confidence was breached according to the test laid out above, an action may be brought for the breaching confidentiality. Remedies for breach of confidence may vary. They can include damages, interlocutory and permanent injunction, and pre and post judgement costs. In order to calculate the remedy, courts will look at the opportunities lost by the plaintiff and the value of the information that was released.
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