Court File and Parties

Court File No.: CV-19-00613382-00CL Date: 2021-11-25 Superior Court of Justice - Ontario

Re: John Aquino, Applicant And: Ralph Aquino and 2241036 Ontario Inc., Respondents

Before: Cavanagh J.

Counsel: Andrew W. MacDonald, for moving party, The Globe and Mail Inc. David Ullman, Stephen Gaudreau, and Alan D. Gold for responding party John Aquino Sharon Kour for Ralph Aquino and Steven Aquino Evan Cobb for Ernst & Young Inc., Monitor for Bondfield Construction Company Ltd. Domenic Magisano for Crowe Soberman Inc., Receiver of 2241036 Ontario Inc.

Heard: May 13, 2021; additional written submissions on July 26, 2021

Endorsement

Introduction

[1] The moving party, The Globe and Mail, moves for an order setting aside the Order of Conway J. dated May 24, 2019 which sealed certain materials so that they are added to the public court file and are made accessible to the public.

[2] John Aquino opposes the motion and submits that the sealing order was properly made and should not be set aside or varied.

[3] For the following reasons, I conclude that the Order of Conway J. sealing certain materials should be set aside.

Factual Background

The Underlying Proceeding

[4] The underlying proceeding was commenced on or about January 28, 2019 by John Aquino as an application to wind up and liquidate 2241036 Ontario Inc. (“224 Ontario”), a single-purpose real estate holding entity of which he is a 50% shareholder. John’s application was commenced after he was removed as President of Bondfield in October 2018 and replaced by his brother, Steven Aquino.

[5] On or about March 2, 2019, Ralph Aquino, a respondent and John’s father, brought a cross-application for, among other things, an order removing John as a shareholder and director of 224 Ontario.

[6] I refer to John Aquino, Steven Aquino and Ralph Aquino as “John”, “Steven”, and “Ralph” to avoid confusion and for convenience.

[7] On March 18, 2019, Steven swore a supplementary affidavit (the “Supplementary Affidavit”) containing invoices relating to Bondfield Construction Company Limited, including its affiliates and subsidiaries (the “Bondfield Group”), and its vendors and contractors. The Bondfield Group is a business owned and operated by the Aquino family, and was a leading design-build and general construction company providing services to both public and private sector clients, including many public-private partnerships.

[8] In addition to the invoices and information relating to the Bondfield Group, the Supplementary Affidavit also makes reference to certain surreptitiously recorded recordings and transcripts. The Supplementary Affidavit states that the audio files “are currently being transcribed by a certified reporting service”. The Supplementary Affidavit states: “our lawyers are requesting a sealing order in this proceeding because the dissemination of the issues herein may have an impact on the Bondfield Group.”

[9] The Supplementary Affidavit was served on John’s counsel based on the parties’ agreement that it would be confidential pending a sealing order.

[10] The Globe and Mail has reported on the activities of and events surrounding Bondfield and related companies over the last several years.

[11] This reporting began after Bondfield underwent a period of rapid expansion in 2014 and 2015, when it was awarded five public infrastructure contracts by the Crown agency Infrastructure Ontario with a total value of $844.3 million, including a redevelopment project at Toronto’s Saint Michael’s Hospital (“SMH”).

[12] John was Bondfield’s President and CEO during its period of expansion.

[13] In 2015 and 2016, The Globe and Mail published a series of articles about the procurement process that led to Bondfield being awarded the SMH project, including regarding a potential conflict of interest related to certain business ties between John Aquino and a senior executive at SMH.

[14] Over time, Bondfield ran into difficulties on numerous projects and, by September 2018, construction was delayed on at least nine of its public infrastructure projects, and at least three other Bondfield contracts had been terminated.

[15] In March 2019, Bondfield and certain related companies (the “Bondfield Group”) commenced an application under the Companies’ Creditors Arrangement Act (“CCAA”).

[16] On April 3, 2019, Ernst & Young Inc. was appointed Monitor of the Bondfield Group.

[17] In the Bondfield CCAA proceeding, forensic investigations of the books and records of the Bondfield Group have been judicially authorized and undertaken.

[18] The Bondfield Group’s financial difficulties and the forensic investigations into its books and records have led to numerous court proceedings, including transfer at undervalue applications decided by Dietrich J. relating to false invoicing schemes. As reported in The Globe and Mail lawsuits have also been commenced against two of Bondfield’s auditors in connection with alleged fraud at Bondfield.

[19] In addition, Zurich Insurance Co. Ltd. (“Zurich”) has commenced an action seeking rescission of surety bonds worth hundreds of millions of dollars that it issued in connection with the SMH project, alleging that during the procurement process, John Aquino and the senior SMH executive “were colluding to ensure that [Bondfield] would submit an artificially low bid.”

The May 24, 2019 Sealing Order of Conway J.

[20] On April 2, 2019, Conway J. made an endorsement in respect of a case conference to be held that states:

CC scheduled before me on April 15/19 2 HRS – 10 am - confirmed.

Directions provided to counsel Re delivery of certain materials directly to me (OH – Judges Admin) on April 12/19 for consideration at the CC.

[21] John filed a Notice of Motion dated April 29, 2019 for a motion for an order sealing the Materials. The Notice of Motion requests an Order sealing the Supplementary Affidavit, “the audio files and/or recordings, and the transcripts of the audio files referred to in the Supplementary Affidavit” pending the determination of the Application or further order of the Court.

[22] On April 30, 2019, Conway J. made a further endorsement: “Motion for sealing order to be heard by me on May 17 – 1 HR confirmed”.

[23] By letter dated May 21, 2019, counsel for John Aquino wrote to Justice Conway and provided a form of order for execution and he offered to attend before her on May 24, 2019 to speak to the matter.

[24] On May 24, 2019, counsel for John appeared before Conway J. No other counsel attended. A factum had been filed stating that the respondents filed the supplementary affidavit of Steven Aquino and various recordings and transcripts, which the applicant seeks to have sealed.

[25] No notice was given to The Globe and Mail or other media of the application for the Sealing Order prior to its issuance.

[26] On May 24, 2019 when the Sealing Order was made, counsel for John Aquino appeared before Conway J. On that day, Conway J. issued an endorsement that reads:

All parties have agreed that the Supp Aff of S. Aquino sworn March 18/19 & Recordings and Transcripts be sealed pending further court order. The Monitor of Bondfield has reviewed the form of order & does not oppose. I am satisfied that the parties have agreed that these materials were to be treated as confidential and that it includes TP information that they identify as confidential. I am satisfied that the Sierra Club test is met & that only a specific restricted part of the court file is subject to this sealing order on the basis of the parties’ agt re confidentiality. OTG as signed by me. This is all subject to further order as provided in para 3 of the order.

[27] The Sealing Order reads:

THIS MOTION made by the Applicant for an Order sealing the Supplementary Affidavit of Steven Aquino, sworn March 18, 2019 (“Supplementary Affidavit”) and certain recordings and transcripts referred to therein (“Recordings and Transcripts”), was heard this day at 330 University Avenue, Toronto, Ontario.

ON READING the Affidavit of John Aquino, sworn January 29, 2019, the Supplementary Affidavit, the Reply Affidavit of John Aquino, sworn April 29, 2019, and the affidavit of Alexandra Teodorescu , sworn May 13, 2019, and on being advised that this form of Order has been reviewed by the Monitor in the Bondfield CCAA Proceedings (Court File No. CV-19-615560-00CL) (the “Monitor”) and on hearing the submissions of counsel for the Applicant, and all other counsel present as set out on the counsel slip, and no one appearing for any other person although duly served as appears from the affidavit of service of Ariyana Botejue, filed,

SEALING OF MATERIALS

1. THIS COURT ORDERS that the Supplementary Affidavit and the Recordings and Transcripts (collectively, the “Materials”) be sealed, kept confidential and not form part of the public record, but rather be placed, separate and apart from all other contents of the Court file, in a sealed envelope attached to a notice which sets out the title of these proceedings and a statement that the contents are subject to a sealing order.

2. THIS COURT ORDERS the nothing in this Order shall prevent the Monitor or any person currently in possession of the Materials from reviewing and investigating the Materials and the matters set out therein, from providing the Materials to any governmental authority or from filing the Materials in the Bondfield CCAA Proceeding or any other proceeding on a confidential basis pending an Order of the Court in the Bondfield CCAA Proceeding, or other proceeding, as to the sealing of the Materials in such proceeding.

3. THIS COURT ORDERS that, this Order may be varied and the sealing of the Materials lifted in whole or in part, on reasonable notice to the parties, by and Order of a Judge of the Commercial List.

[28] According to the Sealing Order, Conway J. reviewed three publicly-filed affidavits before ordering that the materials be sealed:

a) the Affidavit of John Aquino sworn January 29, 2019;

b) the Reply Affidavit of John Aquino sworn April 29, 2019; and

c) the Affidavit of Alexandra Teodorescu sworn May 13, 2019.

[29] In his Reply Affidavit, John states that counsel for the Respondents has produced several hours of recordings and transcripts in which Steven purported to record conversations with him without his knowledge or permission. John states in his affidavit that the recordings appear to deal with alleged accounting issues related to Bondfield. John expresses his view in the affidavit that the recordings “to the extent they are accurate (which is not admitted) are irrelevant to this proceeding and I have not made any serious effort to review or consider them at this time in any detail”. He states that to the extent he has reviewed the recordings “I note that in the recordings Steven badgers me to try to elicit incriminating statements, but in fact the only succeeds in extracting various contradictory answers which are proof of nothing other than his illicit agenda and the level of deceit he is prepared to engage in for his purposes”. John states in the Affidavit that the recordings “did not accurately reflect the full extent of the conversations that took place in the relevant time period between myself, Steven and Ralph” and that he believes “that the recordings may have been edited or tampered with so that parts of the conversations have been edited out”. John states that he is asking his counsel to seek to have the tapes sealed, and that a March 19 email from his counsel sets out the reasoning for this request.

[30] The March 19, 2019 email is from John’s counsel to counsel for Ralph (and Steven) and is marked “With Prejudice”. In this email, John’s counsel asks counsel for Ralph and Steven to withdraw the affidavit in its entirety and advises that if counsel intends to proceed with the affidavit, John’s counsel will provide written reply materials and cross-examine Steven on the allegations, “all of which will become part of the public record”. John’s counsel states “I know you intend to seek a sealing order, which we may not necessarily oppose, but I think you can be pretty certain that the Globe and Mail (who are following this matter) will be successful [in] opposing a sealing order on the basis of the public interest in this matter”.

[31] On May 13, 2019, a lawyer in the firm representing John swore an affidavit to attach “[t]he complete email chain in relation to sealing the Supplemental Affidavit of Steven Aquino, sworn March 18, 2019, and related recordings and transcripts” because the chain attached to John’s reply affidavit was incomplete. This email correspondence indicates that the recordings and transcripts in issue were made available to John and his counsel on March 21, 2019, after a confidentiality undertaking was provided. Counsel for Steven and Ralph indicated in an email dated March 21, 2019 that they would be including the transcripts in a supplementary affidavit.

References to Sealing Order in other proceedings

[32] On the day the Sealing Order was issued, the Monitor filed its Second Report in the Bondfield CCAA proceeding. In this Report, referred to Steven’s March 18, 2019 affidavit and states that “the information in the March 18 Affidavit is directly relevant to the above-noted investigation [forensic investigations into the Bondfield Group], and that the Monitor is of the view that the information disclosed in this affidavit increases the urgency of advancing with Phase II of the investigation”.

[33] Hainey J. authorized the Phase II Investigation on May 30, 2019.

[34] In October 2019, the Monitor issued its Phase II Investigation Report which is publicly accessible. Based on the Phase II Investigation, Hainey J. authorized the Monitor to commence an application against John and others to seek the recovery of amounts paid by the Bondfield Group to certain suppliers over the years. The Monitor alleged that John and others had perpetrated a false invoicing scheme involving transactions that constituted transfers at undervalue under s. 96 of the Bankruptcy and Insolvency Act (the “TUV Application”).

[35] After the Sealing Order was granted, it was continued on consent of the parties, as set out in an Endorsement of Justice Conway dated October 8, 2019.

[36] The Sealing Order was considered by Hainey J. on August 26, 2020. On that day, Hainey J. made an endorsement in which he gave directions with respect to the application. In his endorsement, Hainey J. referred to the Sealing Order and wrote that this affidavit “may be provided by the Monitor to the parties to this Application, to the Trustee in Bankruptcy of the Forma-Con entities, the parties to the Trustee’s companion Application, to Zurich Insurance and Bridging Finance provided that such parties execute non-disclosure agreements to maintain the confidentiality of this affidavit”. Justice Hainey wrote in his endorsement that this direction does not vary the Sealing Order and is subject to any further order that may be made by Justice Conway.

[37] No separate sealing order was made in the TUV application.

[38] On March 19, 2021, Dietrich J. released her decision in the TUV Application (and in a parallel application) and made a number of findings including that John “exercised total control over the false invoicing schemes, in respect of which he tacitly acknowledged his wrongdoing”. This decision has been appealed.

Contents of Court File and Statement of Agreed Facts

[39] When this motion first came before me, I granted an adjournment so that the parties could inspect the court file to determine what materials had been sealed and were the subject of the Sealing Order.

[40] On the return of the motion, the moving party and John Aquino submitted a Statement of Agreed Facts by which they agreed, for purposes of this motion only, that the following facts may be accepted by the Court as true without the necessity of tendering evidence as proof:

(1) On April 21, 2021, counsel to John Aquino emailed counsel to Ralph and Steven Aquino to inquire whether they recalled how the sealed materials were filed:

Further to my voicemail just now and the recent correspondence with the Globe, after reviewing the record we are not aware of any affidavit attaching the recordings and transcript having been filed with the Court. Are you aware of one, and if so, can you send it to us with the confirmation of filing?

(2) On April 21, 2021, Sharon Kour, counsel to Ralph and Steven Aquino, by reply email advised as follows:

I understand that a brief containing excerpts of the transcript was provided to the Court. The attached endorsement Justice Conway from the appearance on April 2, 2019, at which counsel for John Aquino were present, indicates Justice Conway provided directions to counsel regarding the delivery of confidential materials to her.

I understand the brief of excerpts was walked up to Judge’s reception and delivered to Justice Conway there. I am not aware if the materials would have made it into the Court file.

Attached at Tab 1 is a copy of the email chain dated April 21, 2021.

(3) On April 22, 2021, at the return of the Globe and Mail Inc.’s motion to set aside or vary the sealing order of Justice Conway dated May 24, 2019 (the “Sealing Order”), Justice Cavanagh granted an adjournment of the motion in order for the parties to inspect the sealed Court file (the “Seal Court File”) to determine what documents were filed pursuant to the Sealing Order.

(4) Both counsel to the Globe and Mail Inc. and counsel to John Aquino inspected the Seal Court File.

(5) The Sealed Court File contains the following:

a) The Supplementary affidavit of Steven Aquino dated May 18, 2019, with Exhibits A to F.

b) “Excerpts from Transcripts” dated April 11, 2019, filed by Brauti Thorning LLP.

(6) For greater clarity, the Sealed Court File and the public court file do not contain the following materials:

(a) Any tape recordings;

(b) Complete transcripts of the tape recording; or,

(c) An affidavit appending the “Excerpts from Transcripts”.

[41] In my reasons, I refer to the “Excerpts from Transcripts” described in paragraph 5(b) of the Statement of Agreed Facts as “Excerpts”.

Evidence filed by John in response to this motion

[42] In response to this motion, John delivered the affidavit of an articling student for John’s lawyer in respect of criminal matters which states that John is the subject of an ongoing investigation with respect to alleged improprieties in connection with his involvement at the Bondfield Construction Company, including allegations made against him by Steven and Ralph. John also delivered the affidavit of a legal assistant to the lawyers who are his counsel of record in the within application who appended as exhibits to her affidavit a copies of the transcripts from the examinations of Steven and Ralph in the Bondfield CCAA proceeding and a copy of the Endorsement of Justice Conway dated May 24, 2019.

Analysis

[43] The moving party submits that John has failed to meet the high burden that rests on a party seeking a sealing order and that the Sealing Order should be set aside.

Test for a Sealing Order

[44] After this motion was argued, the Supreme Court of Canada released its decisions in Sherman Estate v. Donovan, 2021 SCC 25 and MediaQMI v. Kamel, 2021 SCC 23. I received additional written submissions from the parties in respect of these decisions.

[45] In MediaQMI, an order was made sealing an entire court file in a civil action alleging misappropriation of funds by the respondent. MediaQMI, a newspaper publishing company, filed a motion to unseal the court file in order to have access to the court record including any exhibits. The hearing of the motion was postponed and, in the interim period of time, the action was discontinued. The claimant tried to retrieve the exhibits it had filed, but the court staff could not find them. The respondent to the civil proceeding applied to the court for certain relief and, at the in camera hearing, counsel for the claimant made an oral request to retrieve the exhibits. The application judge ordered that the court file be unsealed and, with regard to the oral request to retrieve the exhibits, the application judge, relying on an article in the Quebec Code of Civil Procedure, authorized the claimant to retrieve the exhibits because the proceeding had been terminated by a discontinuance. The claimant retrieved the exhibits the next day. MediaQMI appealed the decision and asked the Court to order the claimant to provide a copy of the exhibits to them.

[46] Côté J., writing for the majority, concluded, at para. 48:

Article 11 C.C.P. gives the public the right to have access to court records with the documents and exhibits they contain at the time they are consulted, subject to exceptions for confidential information. It gives “access to exhibits” only to the extent that they are in the record. Where parties are slow to retrieve their exhibits at the end of a proceeding, the exhibits will remain accessible to the public until they have been retrieved from the record or destroyed by the court clerk. But once the exhibits have been retrieved or destroyed, the public no longer has access to them.

[47] Côté J. concluded, at para. 72, that MediaQMI cannot obtain a copy of the exhibits that were in the court record at the time its “Motion to unseal” was filed.

[48] In Sherman Estate, a prominent couple was found dead in their home. The deaths had no apparent explanation and generated intense public interest. The estate trustees sought to stem the intense press scrutiny prompted by the events by seeking sealing orders of the probate files. The application judge sealed probate files, concluding that the harmful effects of the sealing orders were substantially outweighed by the salutary effects on privacy and physical safety concerns. The Court of Appeal allowed the appeal and lifted the sealing orders, concluding that the privacy interest advanced lacked a public-interest quality, and that there was no evidence of a real risk to anyone’s physical safety.

[49] Kasirer J. writing for the Court, provides an overview of the importance of the open court principle, and the circumstances where a restriction on the open court principle may be justified, at paras. 1-3:

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 court, all of which helps make the justice system fair and accountable.

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.

Notwithstanding this presumption, exceptional circumstances do arise where competing interests justify a restriction on the open court principle. Where a discretionary order limiting constitutionally-protected openness is sought - for example, a sealing order, a publication ban, 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.

[50] Kasirer J., at para. 38, re-cast the test for discretionary limits on presumptive court openness as had been set out in Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41:

The test for discretionary limits on presumptive court openness has been expressed as a two-step inquiry involving the necessity and proportionality of the proposed order (Sierra Club, at para. 53). Upon examination, however, this test rests upon three core prerequisites that a person seeking such a limit must show. Recasting the test around these three prerequisites, without altering its essence, helps to clarify the burden on an applicant seeking an exception to the open court principle. In order to succeed, the person asking a court to exercise discretion in a way that limits the open court presumption must establish that:

(1) court openness poses a serious risk to an important public interest;

(2) the order sought is necessary to prevent this serious risk to the identified interest because reasonably alternative measures will not prevent this risk; and

(3) as a matter of proportionality, the benefits of the order outweigh its negative effects.

Only where all three of these prerequisites have been met can a discretionary limit on openness - for example, a sealing order, a publication ban, an order excluding the public from a hearing, or a redaction order - properly be ordered. This test applies to all discretionary limits on court openness, subject only to valid legislative enactments [citation omitted].

Are the “Excerpts” properly in the Court file?

[51] John relies on the fact that prior to the hearing of this motion, it was discovered that the sealed documents in the court file contained only the Supplementary Affidavit of Steven Aquino and the Excerpts. Importantly, despite what the parties had initially thought, Steven never filed the underlying tape recordings, complete transcripts of the tape recordings, or an affidavit appending the Excerpts. The Excerpts were delivered to Justice Conway by hand at or just before a case conference.

[52] John relies on MediaQMI to support his submission that, at the very least, there can be no order to “unseal”, or grant access to, the underlying tape recordings or the complete transcripts of the tape recordings as they are not included in the sealed documents in the court file.

[53] John also relies on MediaQMI in support of its submission that on a motion to unseal documents in a court file, the Court must carefully consider what documents are part of the court record.

[54] John submits that the Excerpts were filed without an affidavit swearing to the truth and the contents of the transcripts. He submits that the Excerpts should never have been accepted for filing in their current form, and are not evidence of anything, and ought not to be part of the court record. John submits that, as such, the Excerpts should not be made available by the Court to the media or anyone.

[55] I do not accept this submission. The Excerpts were provided to Justice Conway for her use on the hearing of John’s motion for a sealing order. John’s counsel attended on the motion and could have asked to inspect the materials that had been hand delivered to Conway J. and objected to their filing. The Excerpts were sealed and placed in the court file. The fact that the Excerpts may not constitute admissible evidence in a judicial proceeding does not lead to the conclusion that they should not have been accepted for filing or that they are not properly part of the Court file, as John submits.

[56] The Excerpts were filed in the Court file and properly form part of the Court file.

Has John established that unsealing the Court file poses a serious risk to an important public interest in preventing harm to a personal interest in protecting privacy and dignity?

[57] John relies on Sherman Estate in support of his submission that preventing harm to a personal interest in protecting privacy and dignity can be an important public interest which overrides the open court principle. John cites the following passage from the decision of Kasirer J., at para. 85:

To summarize, the important public interest in privacy, as understood in the context of the limits on court openness, is aimed at allowing individuals to preserve control over their core identity in the public sphere to the extent necessary to preserve their dignity. The public has a stake in openness, to be sure, but it also has an interest in the preservation of dignity: the administration of justice requires that where dignity is threatened in this way, measures be taken to accommodate this privacy concern. Although measured by reference to the facts of each case, the risk to this interest will be serious only where the information that would be disseminated as a result of court openness is sufficiently sensitive such that openness can be shown to meaningfully strike at the individual’s biographical core in a manner that threatens their integrity. Recognizing this interest is consistent with this Court’s emphasis on the importance of privacy in the underlying value of individual dignity, but is also tailored to preserve the strong presumption of openness.

[58] John submits that the continuation of sealing of the Excerpts is supported by the principles in Sherman Estate for several reasons:

a) The Excerpts are of surreptitiously recorded private conversations of a private citizen, selected by an opponent to cast his character in an unfairly jaundiced light;

b) The Excerpts contain untested, unattested to and unproven but highly sensitive and potentially damaging alleged statements;

c) John had a reasonable expectation that his private family communications would not be recorded without his consent, which was not sought or given;

d) John was not the entity who filed the materials which are sealed. He did not have the opportunity to consider whether or not to share this information with the Court.

e) The Excerpts are wholly irrelevant to the issue of the litigation, whether or not John is or is not a 50% shareholder of certain companies.

[59] In Sherman Estate, the Court, at para. 46, disagreed with the submission that “an unbounded interest in privacy qualifies as an important public interest under the test for discretionary limits on court openness”. However, the Court recognized that “in some of its manifestations, privacy does have social importance beyond the person most immediately concerned”, and that the recognition by the Supreme Court of Canada of the public importance of privacy in various settings “sheds light on why the narrower aspect of privacy related to the protection of dignity is an important public interest”. The Court accepted, at para. 47, that “[p]ersonal concerns that relate to aspects of the privacy of an individual who is before the courts can coincide with a public interest in confidentiality”. The Court held, however, at para. 49, that “the public importance of privacy cannot be transposed to open courts without adaptation”, and “[o]nly specific aspects of privacy interests can qualify as important public interests under Sierra Club”.

[60] The Court, at para. 55, held that in reconciling the “dual imperatives” of preserving a “modicum of privacy” and of open courts, the question becomes “whether the relevant dimension of privacy amounts to an important public interest that, when seriously at risk, would justify rebutting the strong presumption favouring open courts”.

[61] The Court in Sherman Estate went on to address how to answer this question, and held that caution is required in deploying the concept of the “public importance of privacy” in the test for discretionary limits on court openness. The Court accepted, at para. 56, that “recognition of a public interest in privacy could threaten the strong presumption of openness if privacy is cast too broadly without a view to its public character”. Kasirer J., at paras. 57-58 quoted the statement of Dickson J., as he then was, in Attorney General of Nova Scotia v. MacIntyre, 1982 CanLII 14 (SCC), [1982] 1 S.C.R. 175, at p. 185, that “[a]s a general rule the sensibilities of the individuals involved are no basis for exclusion of the public from the judicial proceedings”, and affirmed that “[w]hile individuals may have an expectation that information about them will not be revealed in judicial proceedings, the open court principle stands presumptively in opposition to that expectation”.

[62] Kasirer J. explained that in assessing whether there is a serious risk to an important public interest, the focus should be “on the purpose underlying the public protection of privacy as it is relevant to the judicial process, in order to fix precisely on that aspect which transcends the interests of the parties in this context.” One must not simply invoke an important interest, but must overcome the presumption of openness by showing a serious risk to this interest on the facts of a given case, a burden which “constitutes the true initial threshold on the person seeking to restrict openness”. Kasirer J. held, at para. 62, that an important public interest concerned with the protection of dignity should be understood to be seriously at risk only exceptionally, and in limited cases.

[63] John submits that the information in the Excerpts is directly related to issues in dispute in ongoing criminal investigations and civil proceedings and that setting aside the Sealing Order would hinder his ability to make a full answer and defence to the criminal proceedings or to present his case as a civil litigant. John submits that if the documents from the sealed Court file are obtained from Steven and provided to the moving party, the prejudicial effect of publication would be diminished because the information would not seem to the public as if it was coming from the Court. I do not accept that this distinction justifies overriding the open court principle. The moving party, in publishing information concerning the content of the Court file, would have obligations of fairness in its reporting, including not to mischaracterize the Excerpts as somehow bearing the Court’s stamp of legitimacy.

[64] On the evidence before me, there are no criminal charges that have been brought against John that are pending. If criminal charges are brought, it is open to John to seek restrictions on publication of information to protect his Charter rights.

[65] I do not accept that the fact that the Excerpts relate to issues in civil litigation is sufficient to establish a serious risk to an important public interest. In this respect, I rely on Fairview Donut Inc. v. The TDL Group Corp., 2010 ONSC 789, where Strathy J., as he then was, at para. 48, approved the observation of Nordheimer J., as he then was, in Lederer v. 372116 Ontario Ltd. (c.o.b. Hemispheres International Manufacturing Co.) (2000), 2000 CanLII 22408 (ON SC), 50 O.R. (3d) 282 (ONSC) that “litigation frequently involves disclosure of sensitive, embarrassing and sometimes prejudicial information, but the principle of open justice admits of limited exceptions”.

[66] Although the Excerpts are portions of transcripts of allegedly recorded telephone calls and are not accompanied by an affidavit attesting to their accuracy, the fact that materials in a court file may not qualify as admissible evidence does not, in my view, justify a sealing order to protect the materials from public view. As I have noted, John brought the motion for an order sealing the Supplementary Affidavit of Steven sworn March 18, 2019 that refers to existence of audio recordings of conversations with John which are being transcribed. John’s counsel appeared before Conway J. when the Sealing Order was obtained, after the Excerpts had been hand delivered to Conway J. to be used at the motion. It was open to John’s counsel to find out what materials had been provided to the court for his motion and to object to the filing of these materials if he thought they should not be filed.

[67] In this case, various allegations against John in relation to his role with and actions taken in connection with the Bondfield Group are already in the public domain through court proceedings and public reporting. In Sherman Estate, the Court held, at para. 81, that it is appropriate to consider the extent to which the information is already in the public domain. Although the Court noted that the fact that some information is publicly available does not preclude further harm to the privacy interest by additional dissemination, I take the fact that there has already been significant information concerning the subject matter of the Excerpts made available to the public as a factor that weighs against the conclusion that unsealing the Excerpts poses a serious risk to an important public interest.

[68] The assertion that unsealing the Excerpts may lead to disclosure of information that is disadvantageous or distressing to John, or that such disclosure may cast John’s character in an unfair light and harm his reputation, is insufficient, on the evidence before me, to establish a risk to the narrow interest in privacy concerned with the protection of human dignity that qualifies as a public interest.

Has John established that the fact that the parties agreed that the Materials in respect of which the Sealing Order was sought would be kept confidential justifies the Sealing Order?

[69] John submits that Conway J. properly considered the relevant factors when the Sealing Order was made. One of these considerations was that the parties agreed to have the Materials sealed.

[70] In Hollinger Inc. v. The Ravelston Corporation Limited, 2008 ONCA 207, Juriansz J.A., dissenting in part, addressed the argument that the parties’ wishes should influence whether a sealing order is made:

In this case, to the extent Hollinger and the Blacks agreed the Mareva file should remain sealed because of the potential prejudicial effect on Mr. Black’s criminal trial or because the material had been filed on an ex parte motion, these factors had already been considered by the motion judge. If these factors could provide a basis to keep the material sealed they would do so independently of the parties’ wishes for confidentiality. Here, there was no suggestion of any additional reason why the parties’ wishes should outweigh the open court principle. I agree with the remark of Farley J. that “Sealing orders cannot be granted merely because the parties involved agreed to have the material sealed – or ‘withdrawn’: Stelco Inc. (Re), 2006 CanLII 1774 ()N SC), [2006] O.J. No. 277, 17 C.B.R. (5th) 95 (S.C.J.).

In my view, in this case there was no basis for attaching weight to the parties’ wish for confidentiality is a factor independently of the others the motion judge identified and considered.

[71] The fact that parties agree that information or documents is confidential and should not be available to the public if filed in court proceedings is clearly insufficient to justify an order sealing such documents and limiting the open court principle. If this were the case, the open-court principle could be readily circumvented by parties wishing to protect documents and information from public scrutiny.

[72] In his factum, John submits that there is nothing which prevents the moving party from speaking to Steven about the materials or from obtaining the materials from Steven directly. It appears that John does not rely on a private agreement that the materials should be kept confidential to support his submissions that the Sealing Order should not be set aside.

Has John established that the rights of third parties justifies continuation of the Sealing Order?

[73] John also submits that the rights of third parties should be considered in deciding whether or not materials in a court file should be sealed. John submits that the sealed materials contain information about third-party companies who are not parties to the litigation and whose confidential business information would be disclosed if the sealing order is lifted.

[74] The burden is on John to establish that the requirements for a sealing order are met. John points generally to the Excerpts and submits that the references in the Excerpts to third parties is sufficient to rebut the presumption of open courts and justify continuation of the Sealing Order. I disagree. John has not provided evidence that is sufficient to establish that there are interests of third parties that may be affected if the Sealing Order is set aside that are such that the strong presumption of open courts is rebutted.

Has John established that setting aside the Sealing Order poses a serious risk to an important public interest in the court not allowing itself give access to the media to scandalous and irrelevant materials?

[75] John submits that there is an important public interest in the court not allowing itself to be a clearinghouse or pathway for scandalous and irrelevant materials to be funnelled to the media without consequence to the filing party. He submits that Conway J. knew the character of the information and dealt with it appropriately in a manner which supports public faith in the administration of justice, which is an important public interest.

[76] I do not accept this submission. In Sherman Estate, at para. 1, the Court described the press as “the eyes and ears of the public” and confirmed that the press is free to inquire and comment on the workings of the courts.

[77] The media has full access to publicly available court files, some of which contain materials that, if disseminated widely, may harm the interests and reputations of citizens. This, however, is a necessary consequence of the open court principle. Kasirer J. held in Sherman Estate, at para. 1, that by protecting the open court principle, the Court enhances the fairness and accountability of the justice system.

Should the Court order alternative measures?

[78] John submits that, if the Sealing Order is not to be left in place, the Court should order alternative measures and (a) review the sealed materials, including the Excerpts, in detail and redact the portions that will irreparably harm John’s dignity; and/or (b) the issue a publication ban on the materials and lift the Sealing Order.

[79] Each of these alternative measures would, in my view, impermissibly limit the open court principle. Such measures may be appropriate in some case, but John has not established on the record before me that either measure should be employed on this motion.

Conclusion

[80] The Sealing Order expressly provides that it may be varied and that it may be set aside in whole or in part by an Order of a Judge of the Commercial List. The submissions made by the moving party on this motion were not made to Conway J. when the Sealing Order was granted. The Sealing Order was made before the decision in Sherman Estate was released in which the Supreme Court of Canada gave significant guidance on how a request for an order limiting the open court principle should be considered, particularly where privacy interests are raised.

[81] I conclude that John has failed to establish that unsealing the Court file poses a serious risk to an important public interest. John has failed to rebut the strong presumption in favour of open courts. The Sealing Order should be set aside.

Disposition

[82] For the foregoing reasons, the Order of Conway J. dated May 24, 2019 is set aside and the documents that are subject to the Sealing Order are accessible to the public.

[83] If the parties are unable to resolve costs, they may make written submission according to a timetable to be agreed upon by counsel and provided to me for approval.

Cavanagh J.

Date: November 25, 2021