In a recent case from Ottawa, Dickson v Kellett, 2018 ONSC 4920, http://canlii.ca/t/htl3h the Court was critical of, and denied, a plaintiff’s request for an order dispensing with the requirement for service of motion documents on the opposing party and a sealing order in the context of a motion for court approval of a settlement reached on behalf of a minor under Rule 7.08 of the Rules of Civil Procedure.
Context: Requirement for Court Approval
Rule 7.08 of the Ontario Rules of Civil Procedure provides that “no settlement of claim made by or against a person under disability, whether or not a proceeding has been commenced in respect of the claim, is binding on the person without the approval of a judge.” Disability is defined in the Rules to include a minor.
The requirement that settlements reached on behalf of parties under disability be approved by the Court is derived from the Court’s paren patraie (“father of the people”) jurisdiction. The overriding rationale behind paren patraie is to ensure that decisions made on behalf of incapable people be in their “best interests”, as the Ontario Court of Appeal explained in Wu Estate v. Zurich Insurance Co.:
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”.[1]
On such a motion or application, Rule 7.08(4) sets out the material required for court approval, including: an affidavit of the litigation guardian setting out the material facts and the reasons supporting the proposed settlement and the position of the litigation guardian in respect of the settlement; an affidavit of the lawyer acting for the litigation guardian setting out the lawyer’s position in respect of the proposed settlement; if the person under disability is a minor who is over the age of sixteen years, the minor’s consent in writing (unless the judge orders otherwise); and a copy of the proposed minutes of settlement.
Sometimes, due to the privileged information that must be provided in the motion material, plaintiff’s counsel will seek a sealing order and/or an order dispensing with service on the opposing party.
Dickson Case: The Plaintiff’s Request
The minor in Dickson was involved in a motor vehicle accident. A claim was started, and a settlement was reached with the defendant. The Court approved the settlement but denied the ancillary relief requested: an order dispensing with the requirement for service of the relevant material on the opposing party and a sealing order.
Justice Corthorn observed that the sole ground identified in support of the ancillary relief was that the affidavits included information “subject to one or the other of solicitor-client privilege and ‘litigation-settlement’ privilege.” Justice Corthorn noted that the plaintiffs did not “define what is meant by the latter form of privilege.” The only example provided of privileged information was where counsel addressed the strengths and weaknesses of the minor’s case.
The plaintiffs argued that the court would “run afoul of the intended purpose of r 7.08 if the moving party is required to disclose the frailties of their case to the responding party.”[2]
Analysis
The decision opens with a quote from the Supreme Court of Canada case of Vancouver Sun (Re), 2004 SCC 43 on the ‘open court principle’ in Canada, noting that “openness” is “necessary to maintain the independence and impartiality of the courts”.
Justice Corthorn goes on the examine the two requests with the ‘open court principle’ in mind:
Order Dispensing with Service of Documents
Justice Corthorn referred to the Rules of Civil Procedure which require a notice of motion to be served on an opposing party unless there is an exception provided in the Rules (where impracticable or unnecessary or where delay encountered for service to be effected may result in serious consequences). Her Honour concluded that the Rules do not otherwise include an exception to the requirement for service that in any way encroaches on the open court principle.[3]
Sealing Order
Section 137(2) of the Courts of Justice Act (“CJA”) provides the statutory authority for the court to grant a sealing order. The CJA does not set out the criteria that must be met for such an order to be made. Such criteria can be found in the Supreme Court of Canada case Sierra Club of Canada v Canada (Minister of Finance) 2002 SCC 41, [2002] 2 SCR 522:
- such an order is necessary in order to prevent a serious risk to an important interest, including a commercial interest, in the context of litigation because reasonably alternative measures will not prevent the risk; and
- the salutary effects of the confidentiality order, including the effects on the right of civil litigants to a fair trial, outweigh its deleterious effects, including the effects on the right to free expression, which in this context includes the public interest in open and accessible court proceedings.
Citing cases since Sierra Club – Foss v Foss[4] and D.B. Trust (Trustees of) v JB (Litigation Guardian of)[5] – Justice Corthorn noted that these cases demonstrate the reluctance of the court to depart from the open court principle.
A statement in counsel’s supporting affidavit that disclosure of the supporting materials would infringe on solicitor-client privilege is generally insufficient to support a sealing order being made: “[c]ounsel, both plaintiffs’ and defence, need reminding of the criteria to be met before relief will be granted that in any way encroaches on the open court principle.”
Justice Corthorn concluded that
[42] For the majority of settlement approval motions, counsel are in a position to provide the court with the requisite evidence without an unwarranted incursion into either solicitor-client or litigation privilege. The further along the proceeding has reached when the settlement is negotiated, the greater the amount of information available to the parties to assess their respective cases. That information comes from one or more of documentary, oral, and medical discovery, mediation, and a settlement conference. The issues in a case, and the relative strengths and weaknesses of each party’s case, are typically not a surprise to the parties and their respective counsel.
[43] Something more than the potential incursion into solicitor-client or some other form of privilege is required to support a request for an order dispensing with service of the relevant documents on the opposing party.
[44] The test for a sealing order is not easily met. If premised solely on the ground that the supporting materials include information that is subject to a claim of privilege, a request for a sealing order is unlikely to succeed.
[45] The satisfaction of the evidentiary requirements on a settlement approval motion—even if requiring some incursion into privileged information—is balanced against:
a) The obligations of the court in fulfilling its parens patriae jurisdiction;
b) The public interest in knowing that the court supervises settlements reached on behalf of minors and persons under a disability; and
c) Transparency in the proceeding, including the settlement approval process.
. . .
[47] The evidence in support of the relief requested is insufficient; . . .
Takeaway
Before seeking a sealing order, or an order dispensing with service in such a situation, it would be wise to include sufficient reason and rationale as to why such relief should be granted. While this appears to be a unique case where this ancillary relief was denied, it is clear that Justice Corthorn placed considerable weight on our ‘open court principle’ in coming to this conclusion.
—
[1] Wu Estate v Zurich Insruance Co. 2006 CanLII 16344 (ON CA) at para 10.
[2] Dickson v Kellett, 2018 ONSC 4920 at para 23.
[3] At para. 13.
[4] 2013 ONSC 1345.
[5] (2009) 97 OR (3d) 544(SCJ)
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Written by: Kimberly A. Whaley
Posted on: November 15, 2018
Categories: Commentary, WEL Newsletter
In a recent case from Ottawa, Dickson v Kellett, 2018 ONSC 4920, http://canlii.ca/t/htl3h the Court was critical of, and denied, a plaintiff’s request for an order dispensing with the requirement for service of motion documents on the opposing party and a sealing order in the context of a motion for court approval of a settlement reached on behalf of a minor under Rule 7.08 of the Rules of Civil Procedure.
Context: Requirement for Court Approval
Rule 7.08 of the Ontario Rules of Civil Procedure provides that “no settlement of claim made by or against a person under disability, whether or not a proceeding has been commenced in respect of the claim, is binding on the person without the approval of a judge.” Disability is defined in the Rules to include a minor.
The requirement that settlements reached on behalf of parties under disability be approved by the Court is derived from the Court’s paren patraie (“father of the people”) jurisdiction. The overriding rationale behind paren patraie is to ensure that decisions made on behalf of incapable people be in their “best interests”, as the Ontario Court of Appeal explained in Wu Estate v. Zurich Insurance Co.:
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”.[1]
On such a motion or application, Rule 7.08(4) sets out the material required for court approval, including: an affidavit of the litigation guardian setting out the material facts and the reasons supporting the proposed settlement and the position of the litigation guardian in respect of the settlement; an affidavit of the lawyer acting for the litigation guardian setting out the lawyer’s position in respect of the proposed settlement; if the person under disability is a minor who is over the age of sixteen years, the minor’s consent in writing (unless the judge orders otherwise); and a copy of the proposed minutes of settlement.
Sometimes, due to the privileged information that must be provided in the motion material, plaintiff’s counsel will seek a sealing order and/or an order dispensing with service on the opposing party.
Dickson Case: The Plaintiff’s Request
The minor in Dickson was involved in a motor vehicle accident. A claim was started, and a settlement was reached with the defendant. The Court approved the settlement but denied the ancillary relief requested: an order dispensing with the requirement for service of the relevant material on the opposing party and a sealing order.
Justice Corthorn observed that the sole ground identified in support of the ancillary relief was that the affidavits included information “subject to one or the other of solicitor-client privilege and ‘litigation-settlement’ privilege.” Justice Corthorn noted that the plaintiffs did not “define what is meant by the latter form of privilege.” The only example provided of privileged information was where counsel addressed the strengths and weaknesses of the minor’s case.
The plaintiffs argued that the court would “run afoul of the intended purpose of r 7.08 if the moving party is required to disclose the frailties of their case to the responding party.”[2]
Analysis
The decision opens with a quote from the Supreme Court of Canada case of Vancouver Sun (Re), 2004 SCC 43 on the ‘open court principle’ in Canada, noting that “openness” is “necessary to maintain the independence and impartiality of the courts”.
Justice Corthorn goes on the examine the two requests with the ‘open court principle’ in mind:
Order Dispensing with Service of Documents
Justice Corthorn referred to the Rules of Civil Procedure which require a notice of motion to be served on an opposing party unless there is an exception provided in the Rules (where impracticable or unnecessary or where delay encountered for service to be effected may result in serious consequences). Her Honour concluded that the Rules do not otherwise include an exception to the requirement for service that in any way encroaches on the open court principle.[3]
Sealing Order
Section 137(2) of the Courts of Justice Act (“CJA”) provides the statutory authority for the court to grant a sealing order. The CJA does not set out the criteria that must be met for such an order to be made. Such criteria can be found in the Supreme Court of Canada case Sierra Club of Canada v Canada (Minister of Finance) 2002 SCC 41, [2002] 2 SCR 522:
Citing cases since Sierra Club – Foss v Foss[4] and D.B. Trust (Trustees of) v JB (Litigation Guardian of)[5] – Justice Corthorn noted that these cases demonstrate the reluctance of the court to depart from the open court principle.
A statement in counsel’s supporting affidavit that disclosure of the supporting materials would infringe on solicitor-client privilege is generally insufficient to support a sealing order being made: “[c]ounsel, both plaintiffs’ and defence, need reminding of the criteria to be met before relief will be granted that in any way encroaches on the open court principle.”
Justice Corthorn concluded that
[42] For the majority of settlement approval motions, counsel are in a position to provide the court with the requisite evidence without an unwarranted incursion into either solicitor-client or litigation privilege. The further along the proceeding has reached when the settlement is negotiated, the greater the amount of information available to the parties to assess their respective cases. That information comes from one or more of documentary, oral, and medical discovery, mediation, and a settlement conference. The issues in a case, and the relative strengths and weaknesses of each party’s case, are typically not a surprise to the parties and their respective counsel.
[43] Something more than the potential incursion into solicitor-client or some other form of privilege is required to support a request for an order dispensing with service of the relevant documents on the opposing party.
[44] The test for a sealing order is not easily met. If premised solely on the ground that the supporting materials include information that is subject to a claim of privilege, a request for a sealing order is unlikely to succeed.
[45] The satisfaction of the evidentiary requirements on a settlement approval motion—even if requiring some incursion into privileged information—is balanced against:
a) The obligations of the court in fulfilling its parens patriae jurisdiction;
b) The public interest in knowing that the court supervises settlements reached on behalf of minors and persons under a disability; and
c) Transparency in the proceeding, including the settlement approval process.
. . .
[47] The evidence in support of the relief requested is insufficient; . . .
Takeaway
Before seeking a sealing order, or an order dispensing with service in such a situation, it would be wise to include sufficient reason and rationale as to why such relief should be granted. While this appears to be a unique case where this ancillary relief was denied, it is clear that Justice Corthorn placed considerable weight on our ‘open court principle’ in coming to this conclusion.
—
[1] Wu Estate v Zurich Insruance Co. 2006 CanLII 16344 (ON CA) at para 10.
[2] Dickson v Kellett, 2018 ONSC 4920 at para 23.
[3] At para. 13.
[4] 2013 ONSC 1345.
[5] (2009) 97 OR (3d) 544(SCJ)
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