Sealing orders lifted in Sherman Estate files: SCC

High court rules that orders were unjustified and affirms open court principle in high-profile case

Sealing orders lifted in Sherman Estate files: SCC
Iris Fischer of Blake, Cassels & Graydon LLP in Toronto acted for the successful respondents in the case.

The media now have the right to access the late Barry and Honey Sherman estate files after a unanimous Supreme Court ruled today that the sealing orders on the files were unjustified.

In Sherman Estate v. Donovan, the Supreme Court noted the strong presumption favouring the open court principle, as established in Dagenais v. Canadian Broadcasting Corp. and R. v. Mentuck. The SCC recently reformulated the principle in applying it for sealing orders in Sierra Club of Canada v. Canada (Minister of Finance).

“It is understood that this [open court principle] allows for public scrutiny which can be the source of inconvenience and even embarrassment to those who feel that their engagement in the justice system brings intrusion into their private lives,” Justice Nicholas Kasirer wrote for the court.

“But this discomfort is not, as a general matter, enough to overturn the strong presumption that the public can attend hearings and that court files can be consulted and reported upon by the free press.”

The case is a high-profile one. In December 2017, billionaire Barry Sherman — founder of Apotex Inc., Canada’s largest producer of generic drugs — and his wife, Honey, were murdered and found in their Toronto home. To date, there have been no arrests made.

Following the Shermans’ deaths, applications for the issuance of a certificate of appointment of estate trustee were made to the court. The trustees sought an oral hearing to request an order sealing the court file before filing their application. The order was meant to prevent the contents of the estate files from being publicly disclosed since the Sherman murder case was the subject of public fascination and the estates involved significant sums of money. A protective order was issued, and the estate files were retained in the judge’s chambers pending further order.

In July 2018, the Toronto Star and its lead investigative reporter, Kevin Donovan, brought applications for a termination of the protective order and to have the estate files fully unsealed. They argued that the sealing orders violated their constitutional rights of freedom of expression and freedom of the press, as well as the principle that courts should be open to the public.

The Ontario Superior Court of Justice upheld the sealing orders, but the Court of Appeal for Ontario overturned that decision. Today’s ruling by the Supreme Court upholds the appellate court’s judgement to set aside the sealing orders.

“It’s a very good day for court openness in this country,” says Iris Fischer, a partner in Blake, Cassels & Graydon LLP in Toronto and lead counsel for the respondents in the case.

“A unanimous court is very clearly affirming the strength and vibrancy and importance of the open court principle and the high-threshold Sierra Club test.”

The court rejected what it described as an “unbounded privacy interest” as insufficient to restrict the public’s and the press’s right to access the court, says Fischer, and agreed with the Star that “a bald recognition of privacy, as an important interest by itself, without nuance, would not be consistent with the constitutional protections for openness and would create confusion.”

Instead, she says, the court clarified that there must be a risk to a public interest in a specific and nuanced way. In the context of privacy, that means “an affront to personal dignity, which the court says is a narrower dimension of privacy and also a high bar.”

Fischer says the decision will guide lower courts, clarifying that an applicant for a sealing order must show that court openness in that situation would meaningfully strike at the individual’s “biographical core” in a way that threatens their integrity.

Assessing risk under the open court principle

The court had most recently reformulated the test to apply for sealing orders in Sierra Club of Canada v. Canada (Minister of Finance). That case identified the two legitimate interests in support of making an exception to the open courts principle as i) protecting the privacy and dignity of victims of crime and their loved ones, and ii) a reasonable apprehension of risk on behalf of those known to have an interest in receiving or administering the assets of the deceased, i.e., the physical safety risks to them.

In today’s judgment, the Supreme Court restructured the test slightly to identify three branches necessary for a court to exercise discretion in a way that limits the open court presumption, namely that:

(1) court openness poses a serious risk to an important public interest;

(2) the order sought is necessary to prevent this serious risk to the identified interest because reasonably alternative measures will not prevent this risk; and,

(3) as a matter of proportionality, the benefits of the order outweigh its negative effects.

“Only where all three of these prerequisites have been met can a discretionary limit on openness — for example, a sealing order, a publication ban, an order excluding the public from a hearing, or a redaction order — properly be ordered,” wrote Justice Kasirer in his reasons. “This test applies to all discretionary limits on court openness, subject only to valid legislative enactments.”

The Supreme Court has clarified that “even if there is a serious risk or public interest, you then have to look at whether restricting openness is necessary in a particular case to prevent the risk,” says Fischer. Even then, she says, the court must look at balancing interests.

Balancing privacy with openness

“In balancing the privacy interests against the open court principle, it is important to consider whether the information the order seeks to protect is peripheral or central to the judicial process,” Justice Kasirer wrote.

“There will doubtless be cases where the information that poses a serious risk to privacy, bearing as it does on individual dignity, will be central to the case,” he continued. “But the interest in important and legally relevant information being aired in open court may well overcome any concern for the privacy interests in that same information. This contextual balancing, informed by the importance of the open court principle, presents a final barrier to those seeking a discretionary limit on court openness for the purposes of privacy protection.”

In this case, “the Sherman Estate information is the kind that’s available every day across the country, in all kinds of estate and court files,” says Fischer. What differentiated this case was its high-profile nature. Yet, the court agreed that the information contained in the Sherman Estate files was not highly sensitive and disclosing it would therefore not endanger the Sherman trustees or family members.

Although privacy concerns can justify a sealing order if the dignity of the individuals in question is at risk, the court found the Sherman Estate had failed to show how lifting the sealing order would do this.

The Sherman Estate had also argued that estate court files are “purely administrative” in nature, says Fischer, with their information personal and not in the public interest to disclose.

“The court roundly rejected that and affirmed the presumption of openness applies to all judicial proceedings, whatever their nature, and rejected the argument that probate doesn’t engage the open court principle or that the openness of those proceedings doesn’t have public value,” Fischer adds.

“They said it does, … and if you’re coming to the court and asking for court process and a court order of probate, in this case, then those proceedings are presumptively open.”

Counsel for the appellants declined to comment.

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