July 26, 2021
Did you know that if your estate requires probate, your intimate financial and personal details may become public record?
This has recently been confirmed by the Supreme Court of Canada in Sherman Estate v. Donovan.
This estate has some notoriety. Barry and Bunny Sherman were wealthy Torontonians. He founded a large generic drug manufacturer. She was well-known for leading the couple’s philanthropic efforts. They were brutally murdered in their home in 2017. The murders remain unsolved. All of this is a matter of public interest, and news coverage.
The estate trustees have sought to do their job of an orderly transfer of assets, with the details remaining private. In addition to simply wanting to avoid the “morbid interest” in the details, family members expressed concern about their personal safety.
The press, and particularly a Toronto Star reporter, wanted to publish details of the probate filings.
The initial application for a “sealing order” preventing details of the estate from becoming public was allowed. The judge described the probate process as essentially administrative. The Ontario Court of Appeal, and now the Supreme Court, found otherwise. The Court of Appeal found that there was not a real risk to anyone’s physical safety. The Supreme Court agreed.
Probate is a court process. Although it is often routine, and thus regarded as administrative in nature, the act of a judge granting probate validates the will. Once probate is granted, the process provides court supervision of the work of the trustees, and resolves any disputes about the estate. The Supreme Court confirms that all court proceedings are important to the appearance of justice.
In order for this to be effective, there must be public access to the information. This interest in transparency is known as the “open court principle”. Justice done in secret lacks the safeguards required to assure everyone involved that the result is truly just. Public access, including through the press, is part of the constitutional guarantee of of freedom of expression. There are, however, exceptions (for example, the publication ban on the identity of victims of sexual assault).
The issue in Sherman was whether or when an exception arises where the open court principle conflicts with privacy interests, such as those of of the family, the trustees, and others involved in the estate. Privacy rights are also considered “a fundamental value necessary to the preservation of society”, but what this means in practice is very much a developing and undefined concept.
It is very rare for courts to explicitly consider the open court principle in depth, as happened in this case.
The Supreme Court articulates a test for exceptions to the open court principle. Three conditions must be met:
- Court openness must pose a serious risk to an important public interest;
- The order sought must be necessary to prevent this serious risk because no reasonable alternative measure will prevent the risk; and
- The benefits of the order must outweigh its negative effects.
Some degree of loss of privacy is inherent in any court proceeding. What distinguished the exceptions to the open court principle is when the disclosure results in more than inconvenience or even embarrassment, and rises to the level of harming a person’s dignity. Dignity is the essential value that underpins the right to privacy. It is a public interest beyond any single person’s individual concerns.
The sexual assault victim is a useful example, being a clear case where the victim’s dignity is the paramount concern, and contrasting with the probate situation, which becomes more obviously about embarrassment or inconvenience than dignity.
Based upon this analysis, the estate did not meet the test.
If you have serious concerns about the privacy of information regarding your estate, it is best to protect that information through estate planning devices which may limit the amount of information required in the probate process.