• Post category:Court Cases

Aquino v. Aquino, 2021 ONSC 7797 (CanLII)

What is the test for setting aside a sealing order?

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. 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. 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.

In March 2019, the Bondfield Group commenced an application under the Companies’ Creditors Arrangement Act (“CCAA”). The Bondfield Group’s financial difficulties and the forensic investigations into its books and records led to numerous court proceedings, including transfer at undervalue applications relating to false invoicing schemes. Law suits were also commenced against two of Bondfield’s auditors in connection with alleged fraud at Bondfield.

The Globe and Mail began reporting on the activities of and events surrounding Bondfield and related companies. On May 24, 2019, Justice Conway granted a Sealing Order sealing three publicly-filed Affidavits, which concerned the details of surreptitiously-recorded telephone calls with members of the Aquino family. The Globe and Mail moved to set aside the Sealing Order, so that the subject Affidavits could be added to the public court file and made accessible to the public. John Aquino opposed the motion on the basis that he was the subject of an ongoing investigation with respect to alleged improprieties in connection with his involvement at the Bondfield Group.

The open court principle is protected by the constitutionally-entrenched right of freedom of expression. As a general rule, the public can attend hearings and consult court files, and the press 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.

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, the applicant must establish the following three prerequisites:

  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.

John argued that preventing harm to a personal interest in protecting privacy and dignity can be an important public interest which overrides the open court principle. He submitted that the continuation of Sealing Order was appropriate because, inter alia, the Affidavits related to surreptitiously recorded private conversations of a private citizen and he had a reasonable expectation that his private family communications would not be recorded without his consent. Further, the Affidavits 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.

The Court rejected John’s argument, noting that there were no pending criminal charges against John. If criminal charges were later brought against him, it was open to John to seek restrictions on publication of information to protect his Charter rights. The Court also rejected the argument that the fact that the sealed content related to issues in civil litigation was sufficient to establish a serious risk to an important public interest. The assertion that unsealing the Affidavits could lead to disclosure of distressing or disadvantageous information that could cast John’s character in an unfair light and harm his reputation was not sufficient to establish a risk to the narrow interest in privacy concerned with the protection of human dignity that qualifies as a public interest.

Moreover, the fact that parties agree that information or documents is confidential and should not be available to the public if filed in court proceedings was 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.

Finally, John argued 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. The Court disagreed, affirming that the press is “the eyes and ears of the public” and is free to inquire and comment on the workings of the courts. 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.

Accordingly, the Court concluded that John failed to establish that unsealing the Court file posed a serious risk to an important public interest, and ordered that the Sealing Order be set aside.

Judge: Cavanagh J.

Counsel: Andrew W. MacDonald of WeirFoulds LLP for The Globe and Mail Inc.; David Ullman and Stephen Gaudreau of Blaney McMurtry LLP and Alan D. Gold of Robichaud Law for John Aquino; Sharon Kour of Weisz Fell Kour LLP for Ralph Aquino and Steven Aquino; Evan Cobb of Norton Rose Fulbright Canada LLP for Ernst & Young Inc., Monitor for Bondfield Construction Company Ltd.; and Domenic Magisano of Lerners LLP for Crowe Soberman Inc., Receiver of 2241036 Ontario Inc.

Fullcase: https://canlii.ca/t/jkw1g