|
Open Court - Sealing Orders
MORE CASES
Part 2
. S.E.C. v. M.P.
In S.E.C. v. M.P. (Ont CA, 2023) the Court of Appeal considered litigation settlements where a party is under disability. The plaintiffs sought sealing orders regarding the details of such settlements, and here the court considered the role of the parens patriae and open court doctrine:(2) The court’s parens patriae jurisdiction is part of the r. 7.08 analysis, but does not grant a freestanding reason for a sealing order
[36] The appellants argue that it was an error in law for the motion judges to fail to consider the court’s parens patriae jurisdiction and its goal of preventing harm to persons under a disability when determining whether to grant a sealing order. They argue that r. 7.08 leads to public, pervasive, and permanent disclosure of information that can harm the party under disability and that it was an error for the motion judges not to consider this below.
[37] However, I find that r. 7.08 and its disclosure requirements emerge from and support the parens patriae jurisdiction. The open court principle does not conflict with, but rather protects the parties under disability on a systemic level by ensuring that court oversight of minor parties and parties under disability is properly maintained. Where harm may result from applying the open court principle, judicial discretion ensures that the best interests of parties under disability remain protected. Whether the interests of the parties under disability were properly considered in this case is reserved for the discussion on the motion judges’ application of the Sherman test.
[38] To begin, it is useful to assess the background and purpose of r. 7.08 motions. Rule 7.08 has been part of the Rules of Civil Procedure since 1990. However, r. 7.08 did not introduce court settlement approval for minor parties or parties under disability. Rather, it codified the common law rules as to the requirement of court approval of settlements involving persons under disability: see Garry Watson and Derek McKay, Holmested and Watson: Ontario Civil Procedure (Scarborough, Ont.: Carswell, 1984), (2023), § 22:4.
[39] The common law rules mean that, as put by Salhany J.: “For centuries, judges of the Superior Court have exercised the parens patriae guardianship of the sovereign to ensure that the rights of infants and others legally disabled are protected”: Ruetz v. Morscher & Morscher (1996), 1996 CanLII 7985 (ON SC), 28 O.R. (3d) 545, (S.C.), at p. 549. In this older case law, settlements from “a next friend” on behalf of an infant were “not binding on the infant or a bar to the further prosecution of the action unless the court can say that it is for the infant’s benefit”: Mattei v. Vautro (1898) 78 L.T. 682; Rhodes v. Swithenbank (1889) 22 Q.B.D. 577. This task was not taken lightly, but rather was understood as “an important and onerous judicial duty”: Poulin et al. v. Nadon et al., 1950 CanLII 121 (ON CA), [1950] O.R. 219, at p. 222.
[40] The protective purpose of settlement approval for parties under disability has been repeatedly affirmed in this court’s jurisprudence. Perhaps this court’s most significant statement was in Wu, Re, 2006 CanLII 16344 (ON CA), at para. 10, where this court held:The requirement for court approval of settlements made on behalf of parties under disability is derived from the court’s parens patriae jurisdiction. The parens patriae jurisdiction is of ancient origin and is “founded on necessity, namely the need to act for the protection of those who cannot care for themselves…to be exercised in the ‘best interest’ of the protected person…for his or her ‘benefit or ‘welfare’”. The jurisdiction is “essentially protective” and “neither creates substantive rights nor changes the means by which claims are determined”. The duty of the court is to examine the settlement and ensure that it is in the best interests of the party under disability. The purpose of court approval is plainly to protect the party under disability and to ensure that his or her legal rights are not compromised or surrendered without proper compensation. [Citations omitted.] [41] Similarly, in Krukowski v. Aviva Insurance Company of Canada, 2020 ONCA 631, at para. 24, this court affirmed that court approval of settlements is designed to protect the interests of the party under disability. In Tsaoussis (Litigation guardian of) v. Baetz, 1998 CanLII 5454 (ON CA), this court found that “[t]here can be no doubt that a court is obliged to look to and protect the best interests of minors who are parties to legal proceedings” and that these supervisory powers “are most clearly evinced by the requirement that the court approve any consent judgment to which a minor is a party and the closely aligned requirement that the court approve any settlement of a minor's claim before that settlement will bind the minor (rule 7.08)”: at pp. 14-15. While overturning the decision, this court agreed with a motion judge’s statement that “[t]he protection of parties under disability is a vital concept in our civil justice system. Insisting upon strict compliance with r. 7.08 is an important safeguard in maintaining that fundamental principle”: Ryan v. Hebert, 2022 ONCA 750, at para. 15.
[42] This jurisprudence makes clear that r. 7.08 is explicitly designed to protect parties under disability by providing court oversight of settlements that the parties under disability can not themselves shape and agree to. These cases demonstrate that, rather than being an unfair imposition on parties under disability, r. 7.08 motions are best characterized as remedial and protective of those parties’ interests.
[43] To achieve its protective purpose and oversight, motions under r. 7.08 must be accompanied by evidence. This includes, for example, records of medical or expert evidence underlying the settlement, as well as affidavit evidence from the litigation guardian and counsel as to the basis and justification of the settlement, including the amount of the settlement and legal fees involved, among other disclosures.
[44] There is no question that the information included in the record in a r. 7.08 motion could − and generally will − include sensitive and personal information about the party whose claim is being settled. Further, I accept the appellants’ claim that, in light of advancing search and sharing digital technology, personal information made part of a public court record may be vulnerable to wider and more permanent circulation than ever before. This risk may give rise to specific and concerning harms for the parties involved.
[45] However, r. 7.08 addresses these potential harms by affording judges significant discretion to protect the parties’ information. That discretion may be exercised to anonymize, order a publication ban, partially redact, or completely seal some or all of the record in a r. 7.08 motion. The appellants themselves have cited cases where these remedies were deployed on the basis of concern for the interests of minor parties: see, for example, the discussion below of Mother Doe v. Havergal College, 2020 ONSC 2227.
[46] While disclosure may, in some cases bring about the harms the appellants warn of, in my view, the appellants have failed to demonstrate why the existing discretion to address specific situations where limits to the open court principle are justified is insufficient. In exercising that discretion in the context of r. 7.08 motions, the court’s parens patriae jurisdiction is always engaged. The r. 7.08 motions are designed in accordance with parens patriae and the interests of the party under disability are taken into account.
[47] Further, the argument urged by the appellants would, in effect, render all motions under r. 7.08 presumptively confidential. This would screen an important role of the courts from public view in a sweeping fashion. In my view, this would be contrary to the parens patriae purpose of r. 7.08 and the rationale for the open court principle. Where the protection of judicial oversight is provided to vulnerable parties, public oversight of this vital discretionary role through the open court principle arguably becomes even more important.
[48] As the CBC emphasized in its submissions, the open court presumption advances values of particular importance in cases dealing with vulnerable parties: that judges are seen to be acting fairly and in a manner consistent with societal values; that similarly situated people can gain an understanding of how they may be treated by the judicial process; and that the public may learn more about the place of the courts in a democracy generally. For these reasons, while parens patriae may favour sealing orders in some circumstances, it also favours shining a light on the judicial approval settlement agreements through the open court presumption.
[49] Therefore, the argument that sealing orders generally are presumptively justified by the parens patriae jurisdiction must fail. . Harris v. Bayerische Motoren Werke Aktiengesellschaft et al.
In Harris v. Bayerische Motoren Werke Aktiengesellschaft et al. (Div Court, 2024) the Divisional Court considered a class-action discovery redaction issue on appeal, here complicated by the involvement of European and German privacy laws.
Here the court considered CJA 137(2) ['Sealing documents']:Analysis
[40] I conclude that the motion judge did not err in ordering that BMW-AG could redact personal data from its productions. The discretionary order was consistent with established legal principles.
[41] Section 137(2) of the Courts of Justice Act, R.S.O. 1990, c. C.43 provides the court with the authority to order that any document filed in a civil proceeding before it be treated as confidential, sealed and not form part of the public record. While there is no corresponding section dealing with redaction, similar principles apply.
[42] In the decision of McGee v. London Life Insurance Company Limited, 2010 ONSC 1408, 86 C.P.C. (6th) 381, the court dealt with the production of documents in a class action pension surplus case. This decision provides a general statement of the law regarding redaction and production of documents.
[43] In McGee, at paras. 8-9, Strathy J. (as he then was) states:[i]t is impermissible for a party to redact portions of a relevant document simply on the basis of its assertion that those portions are not relevant … The whole of a relevant document must be produced except to the extent it contains information that would cause significant harm to the producing party or would infringe public interests deserving of protection. [Emphasis added.] Additionally, “[t]he party seeking to [redact portions of a document] bears the onus of establishing that redaction is necessary to protect an important interest”: McGee, at para. 13.
[44] In this case the motion judge’s order provided that BMW-AG could redact ... provided that it was in a position to establish that: (a) the redacted information is irrelevant to the issues, serving no legitimate purpose in resolving the issues; and [emphasis added] (b) disclosure of the information would cause significant harm to the producing party or would infringe public interests deserving of protection, which would be the interests of the person whose personal information is being disclosed. The order was clear that relevancy on its own was not sufficient justification to redact; rather irrelevancy as well as significant harm or infringement of an important public interest was also required. The disclosure process set forth in the order is subject to the ongoing oversight by the court.
[45] It is apparent from the motion judges’ reasons that he was alive to and mindful of the open court principle set forth in Sherman Estate v. Donovan, 2021 SCC 25, [2021] 2 S.C.R. 75. The motion judge’s reasons demonstrate a sensitivity to and understanding of the need to balance open courts and full disclosure with other limiting obligations. The motions judge’s decision was consistent with the principles in both the McGee and Sherman decisions. . S.E.C. v. M.P.
In S.E.C. v. M.P. (Ont CA, 2023) the Court of Appeal considered the SOR for appeals of sealing orders:[29] ... The determination of whether a sealing order is warranted under the test in Sherman is one of mixed fact and law. ... . S.E.C. v. M.P.
In S.E.C. v. M.P. (Ont CA, 2023) the Court of Appeal considered sealing orders [under R137(2)] and the related 'open court' doctrine - here where the issue was the balancing of rights between people under disability [their litigation settlements which require judge's approval: R7.08 and CJA 137(2)] and the public interest in access to court documents:[3] Parties may seek to seal documents filed, and thereby keep them from public disclosure, using s. 137(2) of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”), which provides that “[a] court may order that any document filed in a civil proceeding before it be treated as confidential, sealed and not form part of the public record.” However, the CJA does not set out criteria to be met for a sealing or confidentiality order to be made. Instead, the relevant test was provided by the Supreme Court in Sherman Estate v. Donovan, 2021 SCC 25, 458 D.L.R. (4th) 361.
[4] The appellants urge this court to expand the use of s. 137(2) to sealing orders in settlement motions under r. 7.08 on the basis that these motions are heard in-writing and therefore not subject to the open court principle, to fulfil the court’s parens patriae jurisdiction, in protection of solicitor-client privilege, and in the alternative, as a result of the application of the test in Sherman.
.........
(1) Settlement approval motions in writing are subject to the open court principle
[32] The appellants argue that the motion judges erred in law when they failed to consider and apply r. 37.11(1)(a) [SS: 'Hearing in Absence of Public'] to the request to seal the motion records. The appellants highlight that s. 135(2) of the CJA provides: “[s]ubject to section (2) and the rules of the court, all court hearings shall be open to the public...”. However, r. 37.11(1)(a) states that: “A motion may be heard in the absence of the public where … the motion is to be heard and determined without oral argument”. The result, it is argued, is that r. 7.08 orders, because they are heard in writing, are heard in the absence of the public and therefore are not subject to the open court principle.
[33] I reject this submission. There is no basis for holding that the open court principle does not apply to written proceedings generally, or r. 7.08 motions in particular. Courts have not treated s. 37.11(1)(a) in this fashion and there is no indication that the legislature intended such a sweeping abrogation of the open court principle, rather than a procedural effort at improving court efficiency in certain motions. Indeed, as the intervener CMLA underscored, there may actually be a greater rationale for protecting the open court principle in written motions, which would otherwise be secret and not available for public accountability.
[34] Moreover, the appellants’ interpretation goes against the expansive jurisprudence on the open court principle. As Kasirer J. stated in Sherman, “[c]ourt proceedings are presumptively open to the public” and “the open court principle is engaged by all judicial proceedings, whatever their nature” (emphasis added.): at paras. 37, 44. As such, s. 37.11(1)(a) does not provide a way of avoiding the open court principle or a freestanding justification for a sealing order in the context of these appeals or r. 7.08 motions more broadly.
....
[52] The Sherman test was not developed out of whole cloth by the Supreme Court. Rather, it reflected an incremental step in the Court’s jurisprudence on the open court principle and its limits.
[53] In Dagenais v. Canadian Broadcasting Corp., 1994 CanLII 39 (SCC), [1994] 3 SCR 835; and R. v. Mentuck, 2001 SCC 76, [2001] 3 SCR 442, the Supreme Court developed a balancing test for when ordering a publication ban of a court decision would be justified. The Court stated that a publication ban should be ordered only when:(a) such an order is necessary in order to prevent a serious risk to the proper administration of justice because reasonably alternative measures will not prevent the risk; and
(b) the salutary effects of the publication ban outweigh the deleterious effects on the rights and interests of the parties and the public, including the effects on the right to free expression, the right of the accused to a fair and public trial, and the efficacy of the administration of justice: Mentuck, at para. 32. [54] In Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41, [2002] 2 SCR 522, the Supreme Court reformulated the test for a confidentiality order holding that it should be granted where, at para. 53:(a) such an order is necessary in order to prevent a serious risk to an important interest, including a commercial interest, in the context of litigation because reasonably alternative measures will not prevent the risk; and
(b) the salutary effects of the confidentiality order, including the effects on the right of civil litigants to a fair trial, outweigh its deleterious effects, including the effects on the right to free expression, which in this context includes the public interest in open and accessible court proceedings. [55] The test in Sherman further refined the Sierra Club approach as to when the open court principle can be curtailed, particularly in the context of civil proceedings. Under this test, the party seeking a sealing order or publication ban must show that, as outlined at para. 38:(a) Court openness poses a serious risk to an important public interest;
(b) The order sought is necessary to prevent this serious risk to the identified interest because reasonably alternative measures will not prevent this risk; and,
(c) As a matter of proportionality, the benefits of the order outweighs its negative effects. The first prong of this test requires an applicant to show that the open court principle poses a serious risk to an important public interest in the context of the case. [56] In my view, the appeals before the court turn primarily on the first prong of the Sherman test.
[57] In Sherman, the Supreme Court explained the two-step analysis to determine if the open court principle can be said to pose a serious risk to an important public interest, at para. 42:While there is no closed list of important public interests for the purposes of this test, I share Iacobucci J.’s sense, explained in Sierra Club, that courts must be “cautious” and “alive to the fundamental importance of the open court rule” even at the earliest stage when they are identifying important public interests (para. 56). Determining what is an important public interest can be done in the abstract at the level of general principles that extend beyond the parties to the particular dispute (para. 55). By contrast, whether that interest is at “serious risk” is a fact-based finding that, for the judge considering the appropriateness of an order, is necessarily made in context. In this sense, the identification of, on the one hand, an important interest and, on the other, the seriousness of the risk to that interest are, theoretically at least, separate and qualitatively distinct operations. An order may therefore be refused simply because a valid important public interest is not at serious risk on the facts of a given case or, conversely, that the identified interests, regardless of whether they are at serious risk, do not have the requisite important public character as a matter of general principle. [58] As the Supreme Court emphasized in Sherman, whether the interest is at “serious risk” is a fact-specific inquiry grounded in the context of the case: at para. 52. A serious risk can be established through direct evidence or through logical inferences, but these inferences must be “grounded in objective circumstantial facts that reasonably allow the finding to be made”: Sherman, at para. 97. Both the probability of the harm and its gravity are relevant to the assessment: at para. 98.
....
[104] ... in my view, the first prong of the Sherman test that the open court principle be shown to pose a serious risk to a matter of important public interest is not met.
[105] As I conclude the first prong of the Sherman test is not met in these appeals, I do not need to turn to the second step in the Sherman analysis, which considers whether a sealing order is necessary, and if so, the third step, which considers whether the benefits of a sealing order outweigh its negative effects.
[106] If it were necessary to conduct the second step of the Sherman analysis, I would conclude that a sealing order is not necessary. In P1 v. XYZ School, 2022 ONCA 571, at para. 46, this court confirmed that the focus of the analysis at this stage is on “minimal impairment” of the open court principle: the court must consider whether reasonably alternative measures are available and restrict the order as far as possible without sacrificing the prevention of the risk. The less restrictive options of anonymization (adopted in the Dr. C. motion) or a publication ban can deal with the protection of the important public interest at stake in these appeals, if such an interest were found to be at serious risk through the operation of the open court principle.
[107] Finally, if it were necessary to conduct the third step of the Sherman analysis, I would place the value of public accountability in the court discharging its parens patriae jurisdiction through the operation of r. 7.08 motions as a more fundamental value in the justice system than the protection of the privacy of litigants or their lawyers. Therefore, in my view, the benefits of a sealing order would be outweighed by the negative outcomes. . RPR Environmental Inc. v. Saxe Law Office
In RPR Environmental Inc. v. Saxe Law Office (Div Court, 2022) the Divisional Court considers the open court principle, here in relation to an appeal of a sealing order motion:[8] The court has jurisdiction – both inherent and statutory – to seal portions of a court file: Fairview Donut Inc. v. The TDL Group Corp., 2010 ONSC 789 (SCJ); Courts of Justice Act, RSO 1990, c. J.1, s.137(2). While it is true that a sealing order may be made after a document is filed with the court, generally such orders are sought and made before a document is disclosed publicly by being placed in a public court file: Beiko v. Stone, 2019 ONSC 1703 (SCJ).
[9] Solicitor/client privilege is not the only basis on which a party may seek a sealing order. Such an order may be made (among other situations) to protect certain kinds of confidential information, privacy interests, and to protect vulnerable persons (be they parties, witnesses, or other persons involved in a court matter). “Disclosure” will not always vitiate the abses for these claims for sealing orders; that will depend on the circumstances. Solicitor/client privilege, however, differs from these other categories of potentially protected documents and information: the protection afforded to it may be lost, by operation of law, where the privilege holder waives the privilege.[1] . Elbakhiet v. Palmer
In Elbakhiet v. Palmer (Ont CA, 2019) the Court of Appeal considered the test for an order prohibiting the public dissemination of documents in litigation:[26] The principles to be applied on a motion prohibiting documents filed in court proceedings from public dissemination are set out at paras. 53-55 of Sierra Club, which adapts the Dagenais and Mentuk test to the confidentiality of documents context. To obtain a confidentiality order, the requesting party must satisfy a two-part test:i) the order must be necessary to prevent a serious risk to an important interest, including a commercial interest, because reasonable alternative measures will not prevent the risk; and
ii) the salutary effects of the confidentiality order, including the effects on the right of civil litigants to a fair trial, outweigh its deleterious effects, including the effects on the right to free expression, which includes the public interest in open and accessible court proceedings. [27] To meet the necessity part of the test, the requesting party must show: an important interest that can be expressed as a public interest; a real and substantial risk that is well-grounded in the evidence and that poses a serious threat to the interest in question; and no other reasonable alternative to the order sought. . Muslim Association of Canada v. Canada (Attorney General)
In Muslim Association of Canada v. Canada (Attorney General) (Ont CA, 2024) the Ontario Court of Appeal considered a sealing order (open court) application, here on fresh evidence filed on an appeal:SEALING ORDER
[9] The appellant seeks a sealing order in respect of the fresh evidence that the parties sought to introduce on the appeal. This evidence consists of an affidavit from a CRA official attaching the CRA’s final audit decision, and an affidavit from a member of the appellant’s board of directors attaching various documents responding to the CRA’s final audit (collectively, the “Fresh Evidence”). The appellant argues there is a serious risk of harm to the dignity and/or physical safety of its members and of all Muslim Canadians should the Fresh Evidence not be sealed. It seeks an order sealing the Fresh Evidence in its entirety or, in the alternative, making redactions to the Fresh Evidence similar to those ordered by Centa J. in respect of certain parts of the application record filed by the parties in the Superior Court (see Muslim Association of Canada v. Attorney General of Canada, 2023 ONSC 1923 (“Muslim Association sealing order decision (ONSC)”)).
[10] The respondent opposes the sealing order sought by the appellant on the basis that it is inconsistent with the open court principle and that the safety and privacy interests raised by the appellant can be adequately addressed by applying the redactions similar to those ordered by Centa J.
[11] As the Supreme Court observed in Sherman Estate v. Donovan, 2021 SCC 25, [2021] 2 S.C.R. 75, court openness is protected by the constitutionally entrenched right of freedom of expression and is essential to the proper functioning of Canadian democracy. There is a strong presumption in favour of open courts, which presumption can be limited only in exceptional circumstances where there is a demonstrated and serious risk to an important competing public interest. Moreover, any such restrictions on court openness must be no greater than necessary to protect the competing public interest.
[12] Applying these principles, Centa J. noted that where (as in this case) there are serious allegations of government wrongdoing, it is essential that such allegations be litigated in public, since “[w]here government misconduct is alleged, sunlight remains the best of disinfectants.” (Muslim Association sealing order decision (ONSC), at para. 59, citing Ontario (Public Safety and Security) v. Criminal Lawyers’ Association, 2010 SCC 23, [2010] 1 S.C.R. 815, at para. 37.) While Centa J. acknowledged that the privacy and safety concerns identified by the appellant were serious and important, he concluded that those concerns could be adequately addressed by redacting from CRA’s Administrative Fairness Letter (the “AFL”), and from the appellant’s letters responding to the AFL (the “Response Letters”), the names and personal information of individuals who are only peripherally involved in the litigation.[1] However, no redactions were ordered to the parties’ factums or affidavits.
[13] Centa J.’s order represents a careful and appropriate balancing of the open court principle on the one hand and the competing public interests at stake in this litigation on the other. This is reflected in the fact that in their submissions to the case management judge on this appeal, both parties agreed to continue the terms of Centa J.’s order in respect of the application record in the Superior Court (see unreported endorsement of van Rensburg J.A. in Muslim Association of Canada v. Attorney General of Canada (May 14, 2024), M54923).
[14] We see no reason to depart from Centa J.’s carefully tailored approach in determining the appropriateness of limitations on public access to the Fresh Evidence. Like Centa J., we affirm that it is particularly important in litigation involving allegations of government wrongdoing that the public have unfettered access to the relevant court record. We acknowledge that the competing privacy and security interests raised by the appellant are important but conclude that those competing interests can be adequately protected by making limited redactions to the CRA final audit, in a manner analogous to that ordered by Centa J. in relation to the record before the Superior Court.
[15] Accordingly, we dismiss the appellant’s application for a sealing order, and instead order that the parties prepare a redacted version of the CRA final audit, in accordance with the terms set out in para. 63 of Centa J.’s endorsement. For clarity, we do not order any redactions to the documents attached to the responding affidavit filed by the appellant on this appeal, since all those documents appear to already be part of the public record. Should the parties have any difficulty implementing the redactions, they may make written submissions outlining the nature of the difficulty and the respective positions of the parties within 14 days of the release of these reasons.
[16] The parties shall file with the Registrar both an unredacted and the redacted version of the Fresh Evidence. The redacted version will form part of the public record, while the unredacted version shall not be inspected by any person without leave.
|
