November 10, 2020

Almost three years ago today, billionaire couple Barry and Honey Sherman were found murdered in their North York mansion. Their murderer(s) remain at large. In an unusual move, their probate files were sealed to protect the safety, privacy and dignity of the trustees and beneficiaries of their estates. This decision was appealed and now the Supreme Court of Canada will decide how to balance the principle of court openness with the burgeoning right to privacy.

The Lower Court Imposes a Sealing Order

The Shermans’ estate trustees applied for probate (formally known as a Certificate of Appointment of Estate Trustee) in 2018. While the probate process confirms the validity of a will, an estate trustee’s power derives from the will itself – not probate. Whether or not an estate trustee requires probate depends on the nature of the estate’s assets (some assets, such as real property, cannot be dealt with without a probate certificate; other assets, such as shares in a private company, can be).

Probate applications are typically dealt with in writing and ‘over the counter.’ However, the Sherman estates was different. At an ex parte hearing on June 26, 2018, the Shermans’ estate trustees obtained an order sealing their probate application file on the basis that they contained personal information (including home addresses) of the beneficiaries and estate trustees. The Toronto Star and its chief investigative reporter Kevin Donovan moved to set aside the sealing orders.

The unsealing motion was heard on July 31, 2018. The motion judge applied the Supreme Court of Canada’s two part test that a sealing order should only be granted when:

  1. such an order is necessary in order to prevent a serious risk to an important interest because reasonable alternative measures will not prevent the risk; and
  2. the salutary effects of the confidentiality order outweigh its deleterious effects, including the effects on the right to free expression and the public interest in open and accessible court proceedings

With respect to the first part of the test, the court found that serious interests were engaged: the privacy and dignity of crime victims’ families and a reasonable apprehension of risk of harm if the information in the probate files was disseminated (as the perpetrators of the murders were still at large). The court also conclude that these benefits outweighed the negative impact of the sealing order. After all, probate was not required in Ontario and modern estate planning could sometimes avoid the disclosure of an estate’s information being made public. As a result, while acknowledging that it was an unusual outcome, the court maintained the sealing orders.

The Court of Appeal Allows the Appeal

On May 8, 2019, a unanimous panel of the Court of Appeal for Ontario reversed the lower court’s decision. While the appeal court found that lower court appropriately considered the privacy and dignity of the victims and their loved ones, this factor only comes into play on the second part of the test. The first part of the test requires a serious risk and that was not made out in the evidence.

In the Court of Appeal’s view, the lower court’s analysis could be boiled down to “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.” This, the Court of Appeal, found was speculative and no evidence had been put forward that a real risk to anyone’s personal safety existed. As such, the Court of Appeal found that the first part of the test was not made out and no balancing of interests needed to occur. The open court principle must prevail.

The Court of Appeal, however, stayed its decision, as the estate trustees intended to appeal to the Supreme Court of Canada

The Supreme Court Hears the Case

The Supreme Court granted leave to appeal and the matter was argued on October 6, 2020 (oral argument can be found here). Generally speaking, the Supreme Court seemed skeptical of broad-ranging arguments regarding the right to privacy (with Justice Rowe commenting that the reasonable expectation of privacy ‘was not an empty box into which you can throw anything’). Justice Rowe, in particular, was a vigorous champion of the sanctity of open courts – contrasting them with the secrecy of the infamous Star Chamber of the post-medieval English monarchs.

The Supreme Court also questioned whether the risk to the estate trustees and beneficiaries was merely speculative. The estate trustees argued that when assessing the first part of the test, the focus should be on the magnitude of potential harm (which was great as the perpetrators had already resorted to extreme violence) not the probability of it occurring (which was difficult to quantify). Justice Moldaver also noted that the psychological harm to the estate trustees and beneficiaries of having their information (including their addresses) exposed should not be discounted given the sophisticated nature of the crime.

The probate process and estate planning in Ontario generally was also extensively canvassed. The estate trustees noted how there was no requirement for probate and individuals could arrange their affairs to avoid probate. They further explained the various estate planning techniques that could be used for this purpose. The Toronto Star, however, argued that this was a red herring. Whether or not some individuals could avoid probate (for some or all of their assets) was irrelevant; what mattered is that if someone sought probate, then they were seeking to invoke the authority of the court and the open court principle should apply.

Both Justices Kasirer and Karakatsanis tried to find a compromise by asking the estate trustees and the Toronto Star whether a publication ban or redactions could achieve what the estate trustees wanted while limiting the infringement on the open court principle. However, neither side appeared to agree to this approach. A publication ban, it seems, would be the worst of both worlds: the public would remain uninformed but a dedicated criminal could still obtain the information.

It soon became apparent that one of the biggest conceptual questions regarding the open court principle was how the “practical obscurity” of a court file (as the Toronto Star termed it) could be eroded by new information technology. Right now, as a practical matter, it is difficult to obtain a court file. It requires personal attendance at a court office, paying a fee, and likely waiting several days to months for the file to arrive. However, as the estate trustees noted, technology is rapidly changing the world, including the court system.

We will have to wait to find out how the Supreme Court of Canada will decide. Whatever the outcome, the legislature should take a serious look at how the open court principle should be balanced against the right to privacy in a world where practical obscurity becomes potential conspicuousness.