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The Sherman Estate case reaches the Supreme Court

This blog was originally published by The Lawyer’s Daily (part of Lexis Nexis Canada Inc.) in two parts. Part One was published on October 15, 2020 and Part Two was published on October 16, 2020.

The circumstances surrounding the tragic deaths of Barry and Honey Sherman remain a mystery; so too, do the heirs to their fortunes. This is because the estate trustees of Barry and Honey’s estates successfully applied to have their probate applications sealed, thus preventing the public from viewing their wills. In 2018, a reporter for the Toronto Star, Kevin Donovan, challenged the validity of the sealing order.

Last week, on October 6, 2020, the case reached the Supreme Court of Canada where arguments were heard on whether or not to unseal the probate applications.  Compelling submissions were made in respect of two mutually exclusive policy goals. On the one hand there is the open court principle which requires that court proceedings be presumptively open and accessible to the public and the media.  On the other hand there is personal privacy, a fundamental right of every Ontarian, which privacy becomes all the more necessary in the wake of a violent crime.   The Supreme Court reserved its decision.

This article canvasses the issues now being considered by the Supreme Court including the nature of a probate application, the governing principles related to sealing orders and how those principles were applied in the Sherman litigation.

Probate application

An application for a certificate of appointment of estate trustee with a will, commonly referred to as a probate application, if successful, will serve as proof that an estate trustee has the legal authority to deal with the assets of the estate and is proof that the will is valid. A certificate of appointment is usually required by certain institutions, such as banks before they will release a deceased person’s money and the Land Registry Office before they will transfer a deceased person’s land. A probate application includes a copy of the will. As per the open court principle, a member of the public can generally make a request to the registrar of the Ontario Superior Court of Justice for a copy of the probate application, and thereby obtain a copy of the will. That is, unless a sealing order has been made.

Sealing orders

The test as to whether or not a sealing order should be granted was stated by the Supreme Court in Sierra Club of Canada v. Canada (Minister of Finance), [2002] 2 S.C.R. 522 (S.C.C.), at para. 53. First, the party seeking the order must show that the order is necessary to prevent a serious risk to an important public interest which cannot be protected by other reasonable alternative methods. Second, the party seeking the order must establish that the salutary effects of the sealing order outweigh its deleterious effects, including the negative effects on the right to freedom of expression and other public interests served by open and accessible court proceedings. The test is not whether a confidentiality order should be issued in order to “err on the side of caution” or “out of an abundance of caution” — the test is whether it is necessary to do so – R. v. Kossyrine, 2011 ONSC 6081 at para. 16. The principle of open courts is inextricably tied to the fundamental freedoms of thought, belief, opinion and expression, including freedom of the press and other media of communication, guaranteed by s. 2(b) of the Charter – Sierra Club at para. 36. The party seeking a sealing order carries the burden of demonstrating the need for the order: R. v. Mentuck, [2001] 3 S.C.R. 442 (S.C.C.), at para. 38.

The Sherman litigation

The sealing order over the Sherman probate applications was initially granted ex parte and was ordered based upon the perceived risks to the executors and beneficiaries of the two estates arising from the unsolved murders of the Shermans. In denying the motion of the Toronto Star to unseal the probate applications, Justice Dunphy clarified that “the lack of tangible information about the motives and perpetrator or perpetrators of the crime creates a reasonable apprehension of risk to those who are the administrators or beneficiaries of the estate of these two victims” – Toronto Star Newspapers Ltd. v. Sherman Estate 2018 ONSC 4706. He also referred to the need to protect the privacy and dignity of the victims of violent crime and their loved ones. He ordered that the sealing order expire after two years.

The Court of Appeal viewed the matter differently. In a per curiam decision, the court held that the kind of interest that is properly protected by a sealing order must have a public interest component.  The court relied on Sierra Club at para. 55 and H. (M.E.) v. Williams 2012 ONCA 35, at para. 25 to state that personal concerns cannot, without more, justify an order sealing material that would normally be available to the public under the open court principle –  Donovan v. Sherman Estate 2019 ONCA 376. The court stated at para 16:

In our view, the motion judge’s analysis comes down to the proposition that because the Shermans were murdered by some unknown person or persons, for some unknown motive, individuals named as beneficiaries in their estates or as administrators of their estates are at risk of serious physical harm. With respect, the suggestion that the beneficiaries and trustees are somehow at risk because the Shermans were murdered is not an inference, but is speculation. It provides no basis for a sealing order.

The Court of Appeal set aside the sealing orders. The court rejected the estate trustees’ requests to consider redactions to the probate applications as, in the court’s view, the application failed at the “necessity” stage of the analysis, therefore leaving no basis for any redactions.

The Supreme Court heard arguments from counsel for the estate trustees that a “reasonable expectation of privacy” should be enough to meet the first part of the test for a sealing order. Justice Malcolm Rowe balked at this argument, stating “You’ve just flipped the open courts principle. You’ve just said that where someone asserts a privacy interest, it short circuits straight into a balancing act,” He said. “To me, saying that we depart from the open courts principle is an extraordinary step, not the ordinary way of doing business.” Justice Russel Brown stated that the crucial issue was to understand what evidence is necessary to show there’s a reasonable apprehension of harm that could justify restricting access to a court file, and whether such evidence exists in the Sherman case. The Supreme Court reserved its decision.

Select cases dealing with sealing orders in estates and trusts context

In Doe Estate, Re 2003 ABQB 793, the testator’s death had attracted significant media attention. The beneficiary was mentally handicapped, unable to manage his financial affairs and the estate was large. The personal representative’s application for an order sealing the probate file was granted. The court found that the order was necessary to prevent a serious risk to the proper administration of justice. It was found that various people might try to take advantage of the beneficiary if the facts were known, and that a publication ban would be ineffective because the probate file would still be available to the public. In balancing the rights of the parties, the court stated at para. 8

This probate matter is quintessentially a private law matter that does not affect the public in any tangible way, whereas the salutary benefits of a sealing order for Mr. Doe are significant.

The Sherman litigation, and previous cases, have highlighted that where harm to an individual is perceived and a sealing order sought on that basis, evidence of the perceived threat must be provided. In J.B. Trust (Trustees of) v. B. (J.) (Litigation Guardian of) 2009 CarswellOnt 3723 (Ont. S.C.J.), the applicant mother’s two sons received money from a compensation fund after their father was killed in the terrorist attack on the World Trade Center. A 2006 court order directed that the money be placed in two trusts, that the trustees pass their accounts every three years, that the proceeding be treated as confidential and that the court file be sealed and not form part of the public record. On the trustees’ application for a first passing of accounts, they sought an order to seal the court file and to treat the pending application and all future proceedings to pass accounts as confidential. The motion was dismissed. The trustees contended that there was financial or other harm to the boys taking into account the sizeable amounts awarded to them, but the evidence was not persuasive that there was either an important interest to protect or a risk of serious harm to that interest. The courts stated at para. 15:

As to any risk of serious harm to the financial interests of these minors, the evidence does not offer any details about what sort of harm might occur should a sealing order not be granted. Given that the trustees control the assets in the trust, I have some difficulty envisaging the nature of the harm that might occur.

The court held that the risk of publicity to the minor children could be dealt with by permitting the style of cause, any affidavit materials, and any accounts filed on the proposed application to pass accounts to use the initials of the trustees, the trusts, and the two minors instead of their full legal names.

In Foss v. Foss 2013 ONSC 1345, the plaintiff applied to be appointed as the guardian for the person and property of her father. She successfully brought a motion to have the court file sealed. The order was not opposed by the other parties in proceeding. Justice Perell viewed the order to be appropriate in the circumstances as the proceedings put in issue the subject’s medical history and mental capacity as well as his personal financial circumstances. The court held that the proceeding would disclose commercially sensitive records of various businesses in which the subject had an interest.

Conclusion

Counsel should be aware that the courts will interfere with public accessibility to court records only with the greatest reluctance. The task is no less challenging where all parties agree to the sealing order. The consent of the parties is not, and has never been, a proper consideration in such an application: see Scott v. Scott, [1913] A.C. 417 at p. 436 (H.L.). Counsel should be prepared to state why a sealing order is required in the public interest and why no lesser protective measure would be appropriate. When such an order is sought ex parte, the court will be especially protective of the open court principle.  Whether the sealing orders will be reinstated over the Sherman probate applications remains to be seen.

James Dunphy

James Dunphy

The author of this blog is James Dunphy. James is an associate at Wagner Sidlofsky LLP.

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This blog is not intended to serve as a comprehensive treatment of the topic. It is not meant to be legal advice. Every case turns on its specific facts and it would be a mistake for the reader of this blog to conclude how it might impact on the reader’s case. Nothing replaces retaining a qualified, competent lawyer, well versed in this niche area of practice and getting some good legal advice.
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