Ontario Superior Court dismisses privacy breach case against financial due diligence database

The case involved a former senior advisor to the Prime Minister of Kenya

Ontario Superior Court dismisses privacy breach case against financial due diligence database

The Ontario Superior Court of Justice has dismissed an action for defamation and breach of privacy involving global databases used by financial institutions for due diligence purposes.

In Miguna v. Sitel Operating Corporation 2024 ONSC 632, the plaintiff brought an action against Refinitiv Limited, the operator of the World-Check Database, and Sitel Operating Corporation, a customer service provider for Moneygram.  Refinitiv’s subscribers are mainly financial institutions obliged by law to conduct due diligence on certain categories of people before facilitating transactions. This due diligence is part of an effort in the global financial system to combat money laundering.

One category of people concerning whom financial institutions must undertake due diligence are politically exposed persons (PEPs).  Every senior and mid-level participant in every government worldwide is included in the database as a PEP.

The plaintiff, a lawyer qualified in Ontario and Kenya and a former senior advisor to the Prime Minister of Kenya, was included in Refinitiv's World-Check Database as a PEP. The plaintiff claimed this designation led to financial service denials and detentions at international borders.

After an incident involving Moneygram's refusal to release funds to him in October 2021, the plaintiff alleged defamation by the database, which aggregates information from public sources for due diligence purposes.

The Ontario Superior Court of Justice found that the statements in the database about the plaintiff were true in substance and fact, employing the defence of justification. For example, the court noted discrepancies in the plaintiff’s complaints about his portrayal in the database versus publicly available information, including his memoir and website. The database's entry that the plaintiff was suspended by the Prime Minister of Kenya in August 2011 for alleged misconduct was supported by newspaper articles and the plaintiff's admissions in his memoir.

Additionally, the court highlighted that the database's role in the global financial system does not require adherence to Canadian definitions of a PEP. The plaintiff's inclusion in the database as a PEP was deemed appropriate due to his political role in Kenya.

The court dismissed the plaintiff’s action against Refinitiv, concluding that all information in the database was sourced from public domains, negating any breach of privacy claims. Similarly, the claim against Sitel was dismissed because interactions related to the Moneygram transaction had been settled through a previous release, and there was no evidence of defamatory statements made by Sitel employees. The court awarded substantial indemnity costs to the defendants, totalling $265,000, to be paid by the plaintiff.

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