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Disability - Parens Patriae. 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.
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