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Civil Litigation Dicta - Public Access - General (2). Harold The Mortgage Closer Inc. v. Chief Executive Officer of the Financial Services Regulatory Authority of Ontario
In Harold The Mortgage Closer Inc. v. Chief Executive Officer of the Financial Services Regulatory Authority of Ontario (Div Court, 2024) the Divisional Court considered a motion to quash a JR, here which challenged the issuance of a 'notice of proposal' by the 'Financial Services Regulatory Authority' (FSRA) tribunal to revoke and refuse to renew a mortgage broker license, to impose administrative penalties - and as well of the FSRA's publication of tribunal enforcement policy documents, and more. The applicants also filed for a full de novo hearing before the Financial Services Tribunal in relation to this matter.
Here the court addresses the Authority's "publication decisions" - including aspects of the public 'notice of proposal', which the court does not quash out of concern that the 'notice of proposal' contained some defamatory-like statements which had been shown to "to slag them in the marketplace":[8] Under the applicable statutory scheme, the applicants will be entitled to a full hearing process before the tribunal in respect of the allegations contained in the regulator’s notice of proposal. A very high degree of procedural protection is available to the applicants in light of the serious nature of the relief sought against them. The hearing is a full trial de novo. It is not just an appeal from the notice of proposal. The hearing outcome will be based on the evidence to be admitted, after pre-hearing disclosure, cross-examination of witnesses, and submissions.
[9] The regulator rightly distinguishes two types of claims brought by the applicants. They each result in different outcomes.
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[23] The other aspect of the case involves the regulator’s publication decisions. The regulator submits that it did not exercise a statutory power of decision when it adopted its publication guidelines. They are not binding on anyone and do not have the force of law. They just tell the marketplace when to expect enforcement steps to be publicized by the regulator.
[24] Similarly, the regulator submits that it has no statutory duty to publish the applicants’ request for a hearing although the applicants dispute the facts in the notice of proposal and ask the regulator to be fair and balanced.
[25] The applicants can also show that competitors have used the notice of proposal as published by the regulator to slag them in the marketplace. They submit that the regulator’s decisions to publish the notice of proposal and the decision to refuse to publish their request for hearing impair its reputation and impact its legal rights.
[26] As I am not quashing these requests for judicial review, I will say little about them. The SCC has recognized peoples’ legal interest in their reputation. While I am dubious that the applicant has standing to challenge the publication guidelines or that the publication of the guidelines was an exercise of a statutory power, to the extent that the guidelines become an excuse or justification for the regulator’s publication decisions, I would not put challenging them beyond the applicants’ reach.
[27] But the real focus of the applicant is on the regulator’s decision to publish the notice of proposal and the decision to refuse to publish the request for a hearing. It is not impossibly far-fetched that ss. 3 and 6 of the Financial Services Regulatory Authority of Ontario Act impose constraints (if not a duty) on the activity of the regulator especially where reputational harm of a registrant is at risk (or is intended rightly or wrongly). Moreover, since the notice of proposal is not a dead letter in the tribunal hearing, issues of procedural fairness may arise concerning the regulator’s conduct if it affects the fairness of the hearing.
[28] I cannot say that it is plain and obvious that the applicants have no rights vis-à-vis the regulator’s decisions about what to publish or not publish concerning the applicants. I expressly leave open to the panel of the Divisional Court the possibility that it may find this issue too best dealt with first before the Financial Services Tribunal. But while the validity of the notice of proposal and its contents is squarely before the tribunal, I am less sure that this issue will necessarily be before the tribunal.
[29] I am in no way endorsing the strength of the claims to challenge either the guidelines themselves or the publication decisions surrounding the notice of proposal, I do not accept the regulator’s submissions that it is plain and obvious that they are either unreviewable private decisions or decisions that do not impair the legal rights or interests of the applicants.
[30] Mr. Solmon asks me to defer to the panel the question of whether the applicants need or ought to be granted more time to bring their applications under s. 5 (2) of the JRPA. Having quashed the claims against the notice of proposal, perhaps this is no longer an issue. Regardless, in my view, the panel that hears matters on their merits is generally better armed to assess the equities involved in the balancing of interests under s 5 (2). I therefore defer that issue to the panel. . 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. . S.E.C. v. M.P.
In S.E.C. v. M.P. (Ont CA, 2023) the Court of Appeal considered a motion for a sealing order, in part grounded in advancements in technology which can use court-accessible data to generate more personal information regarding case parties:[19] The appellants seek to introduce fresh evidence to demonstrate how private and confidential information about infant plaintiffs has been obtained and disseminated by news organizations using materials filed as part of settlement approval motions.
[20] The fresh evidence is comprised of an affidavit by one of the lawyer’s representing the appellants, together with an exhibit. The affidavit asserts that ONe-Key (a free, online government service) can be used to obtain a court file number and consequently statements of claim containing the full name of the parties despite initialization in the decision. The affidavit includes a private company’s marketing of “precedents” based on information scraped from publicly available court files. The exhibit is a story from a newspaper that included details of a settlement of personal injury litigation involving an infant plaintiff and links to the underlying litigation record through CanLII. . Ontario Addiction Treatment Centres v. Canada (Attorney General)
In Ontario Addiction Treatment Centres v. Canada (Attorney General) (Fed CA, 2023) the Federal Court of Appeal considered an appeal from a JR of a refusal to grant a "request for remission of tax under subsection 23(2) of the (SS: federal) Financial Administration Act". Here the court comments briefly on the 'open court' principle, and makes a useful practice point:[11] The Federal Court erred in closing the whole hearing. The default is that court proceedings are open. Any secrecy must be necessary, justified and minimized: Sherman Estate v. Donovan, 2021 SCC 25 458 D.L.R. (4th) 361; Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41, [2002] 2 S.C.R. 522.
[12] In the Federal Court, the submissions containing confidential information were only a small part of the hearing. At most, it should have closed only a small part of its hearing. In fact, in this Court it was possible to keep the hearing open for all but a few minutes. One way to do this is to invite counsel in the course of their public oral submissions on this point, if necessary, to draw the Court’s attention to paragraphs in the confidential memoranda filed and then to make their points orally without disclosing the confidential information. . Canadian Broadcasting Corp. v. Manitoba
In Canadian Broadcasting Corp. v. Manitoba (SCC, 2021) the Supreme Court of Canada considered lifting a publication ban when the Court of Appeal had ruled below that they were functus officio:[62] It is best to note at the outset that appellate jurisdiction, such as that being exercised by the Court of Appeal in the proceeding below, must be grounded in legislation (R. v. Smith, 2004 SCC 14, [2004] 1 S.C.R. 385, at para. 21). In addition to any explicit grant, statutory and appellate courts should be understood to have the implicit power to control their own process and exercise other powers that are practically necessary to accomplish the role the law assigns them (R. v. Cunningham, 2010 SCC 10, [2010] 1 S.C.R. 331, at para. 19; Lochner v. Ontario Civilian Police Commission, 2020 ONCA 720, at para. 27 (CanLII)). I agree with the Attorney General of British Columbia that it may be unhelpful to describe this implicit authority as “inherent jurisdiction” given that appellate powers are, ultimately, rooted in statute (transcript, at pp. 100‑1).
[63] The legislative foundation for the Court of Appeal’s jurisdiction over the motion on court openness is plain here. As I have said, the supervisory jurisdiction over the court record is a feature of all courts (MacIntyre, at p. 189) and this is no less true of an appellate court. As part of the court’s authority to control its own process, the power over the openness of proceedings and over the court record arises here by necessary implication from the legislative grant of the appellate court’s adjudicative authority (see, generally, Cunningham, at para. 19). As a matter of procedural necessity — a publication ban or a sealing order may remain in place long after the substance of the appeal has been decided — this jurisdiction continues even after the formal judgment on the merits of a given appeal has been entered unless ousted by legislation. The Court of Appeal therefore had continuing, ancillary jurisdiction to consider the CBC’s motion regarding sealing orders and publication bans. This included implied jurisdiction to vary or vacate its orders limiting court openness in accordance with the common law principles considered above. The only remaining question is whether any applicable legislation limits this jurisdiction for the Court of Appeal in this case.
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[77] Turning to the substance of the CBC’s motion, any discretionary limits on access to and publication of the contents of the court record must be understood in reference to the test from Sierra Club as recently recast by this Court in Sherman. Court proceedings are presumptively open to the public (A.B. v. Bragg Communications Inc., 2012 SCC 46, [2012] 2 S.C.R. 567, at para. 11). A court can order discretionary limits on openness only where (1) openness poses a serious risk to an important public interest, (2) the order sought is necessary to prevent that risk and (3) the benefits of the order outweigh its negative effects (Sherman, at para. 38, citing Sierra Club, at para. 53).
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[83] Consistent with this purpose, all materials that are made available to the court for the purposes of deciding the case — in other words, for the purposes of exercising its judicial power — are subject to the open court principle (see Canadian Broadcasting Corp. v. R., 2010 ONCA 726, 102 O.R. (3d) 673, at paras. 42‑44; see also Aboriginal Peoples Television Network v. Alberta (Attorney General), 2018 ABCA 133, 70 Alta. L.R. (6th) 246, at para. 48). In this case, the Court of Appeal had before it a motion to admit the Posner affidavit as new evidence. .... . Ricard v. The University of Windsor
In Ricard v. The University of Windsor (Div Ct, 2021) the Divisional Court considered a motion for a sealing order and publication ban in a judicial review application:[6] I am satisfied that this is an appropriate case for a publication ban and sealing order and that it meets the recently restated test in Sherman Estate v. Donovan, 2021 SCC 25. As held by the Supreme Court, the test requires the court to find that: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 reasonable alternative measures will not prevent this risk; and
c. As a matter of proportionality, the benefits of the order outweigh is negative effects. [7] With respect to the first part of the test, in Sherman Estate, the Supreme Court recognized that preservation of an individual’s dignity is a matter of public interest. At para. 75, the Court held that a person’s dignity can be at risk if sensitive personal information relevant to core aspects of that person’s life are made public through court proceedings. At para 77, the Court specifically identified “subjection to sexual assault or harassment” as the type of personal sensitive information that, if exposed, could pose a serious risk to a person’s dignity. Keeping the identity of complainants confidential in the context of cases involving allegations of sexual assault is also consistent with sealing orders and publication bans made in civil cases that predate the Sherman Estate decision. For example, as held by Faieta J. in Fedeli v. Brown, 2020 ONSC 994 (Sup. Ct.), at para. 9:The privacy interests of a person who makes an allegation of sexual assault or sexual harassment in a civil proceeding is high, particularly when she has not initiated the civil proceeding. A complainant may be subject to unnecessary trauma and embarrassment, both for herself and her family, if she is identified. Without protection of her privacy interests, a person who has been sexually assaulted or sexually harassed may be unwilling to come forward. Further, the failure to afford such protection to a person alleging sexual assault or sexual harassment may deter other persons from coming forward to report sexual misconduct. Such interests are recognized and protected in a criminal proceeding as s. 486.4 of the Criminal Code, R.S.C. 1985, c. C-46, provides that an order banning publication of any information that could identify a victim of sexual assault is mandatory if sought by the Crown or victim. In my view, the policy reflected by s. 486.4 of the Criminal Code is equally applicable in these civil proceedings. [8] Accordingly, I am satisfied that there is a public interest in protecting the confidentiality of Jane Doe and other complainants involved in this case and, therefore, the order requested in this case meets the first part of the Sherman Estate’s test.
[9] I am also satisfied that the order meets the two other parts of the test. The order is necessary to prevent the risk that Jane Doe and the other complainants will be publicly identified. With one small exception addressed below, the relief sought is not overly broad. Finally, the benefits of the order sought outweigh its negative effects. Protecting the privacy interests of Jane Doe and other complainants far outweighs any minimal interest the public may have in knowing their identities. . Sherman Estate v. Donovan
In Sherman Estate v. Donovan (SCC, 2021) the Supreme Court of Canada considers the 'open court' principle, in the context of a newspaper reporting on estate proceedings. The case is a definitive statement by the court on this freedom of expression and privacy issue since Sierra Club of Canada v. Canada (Minister of Finance) (SCC, 2002). See paras 29-36 for a summary, with the 'Test for Discretionary Limits on Court Openness' at paras 37-45, and general comments on the issue of privacy at paras 46-85]:[1] This Court has been resolute in recognizing that the open court principle is protected by the constitutionally‑entrenched right of freedom of expression and, as such, it represents a central feature of a liberal democracy. As a general rule, the public can attend hearings and consult court files and the press — the eyes and ears of the public — is left free to inquire and comment on the workings of the courts, all of which helps make the justice system fair and accountable.
[2] Accordingly, there is a strong presumption in favour of open courts. It is understood that this 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. 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.
[3] Notwithstanding this presumption, exceptional circumstances do arise where competing interests justify a restriction on the open court principle. Where a discretionary court order limiting constitutionally‑protected openness is sought — for example, a sealing order, a publication ban, an order excluding the public from a hearing, or a redaction order — the applicant must demonstrate, as a threshold requirement, that openness presents a serious risk to a competing interest of public importance. That this requirement is considered a high bar serves to maintain the strong presumption of open courts. Moreover, the protection of open courts does not stop there. The applicant must still show that the order is necessary to prevent the risk and that, as a matter of proportionality, the benefits of that order restricting openness outweigh its negative effects.
[4] This appeal turns on whether concerns advanced by persons seeking an exception to the ordinarily open court file in probate proceedings — the concerns for privacy of the affected individuals and their physical safety — amount to important public interests that are at such serious risk that the files should be sealed. The parties to this appeal agree that physical safety is an important public interest that could justify a sealing order but disagree as to whether that interest would be at serious risk, in the circumstances of this case, should the files be unsealed. They further disagree whether privacy is in itself an important interest that could justify a sealing order. The appellants say that privacy is a public interest of sufficient import that can justify limits on openness, especially in light of the threats individuals face as technology facilitates widespread dissemination of personally sensitive information. They argue that the Court of Appeal was mistaken to say that personal concerns for privacy, without more, lack the public interest component that is properly the subject‑matter of a sealing order.
[5] This Court has, in different settings, consistently championed privacy as a fundamental consideration in a free society. Pointing to cases decided in other contexts, the appellants contend that privacy should be recognized here as a public interest that, on the facts of this case, substantiates their plea for orders sealing the probate files. The respondents resist, recalling that privacy has generally been seen as a poor justification for an exception to openness. After all, they say, virtually every court proceeding entails some disquiet for the lives of those concerned and these intrusions on privacy must be tolerated because open courts are essential to a healthy democracy.
[6] This appeal offers, then, an occasion to decide whether privacy can amount to a public interest in the open court jurisprudence and, if so, whether openness puts privacy at serious risk here so as to justify the kind of orders sought by the appellants.
[7] For the reasons that follow, I propose to recognize an aspect of privacy as an important public interest for the purposes of the relevant test from Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41, [2002] 2 S.C.R. 522. Proceedings in open court can lead to the dissemination of highly sensitive personal information that would result not just in discomfort or embarrassment, but in an affront to the affected person’s dignity. Where this narrower dimension of privacy, rooted in what I see as the public interest in protecting human dignity, is shown to be at serious risk, an exception to the open court principle may be justified.
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