A Superior Court judge reserved his decision on Monday in an ongoing court battle between Laurentian University and Ontario’s auditor general.
The auditor general has accused the university of refusing to provide documents for a value-for-money audit into the institution’s finances amid Laurentian’s insolvency proceedings.
In her court filing, Auditor General Bonnie Lysyk said Laurentian has failed to provide unfettered and timely access to information during the probe into the publicly funded university’s governance, operations, and financial decisions launched this past spring.
Laurentian has cut almost 200 staff and a number of programs this year in an effort to balance its books. In response, Ontario's Standing Committee on Public Accounts unanimously passed a motion in April asking the Office of the Auditor General conduct a value-for-money audit on Laurentian's operations from 2010 to 2020.
In September, the auditor filed an application with the Ontario Superior Court of Justice asking a judge to declare her legislated right to privileged information and documents that are necessary to her work.
Lysyk said this is the first time her office has had to take this step.
Laurentian has denied the auditor general’s allegations, claiming that the institution has the option, but not the obligation, to hand over documents covered by solicitor-client privilege.
The university is arguing that if the Auditor General Act does compel them to shared privileged information, it would amount to a “flagrant violation” of the Canadian constitution.
At issue during Monday’s hearing was Section 10 of the 2004 amendment to the Auditor General’s Act, which legislates a party’s duty to furnish information.
The act states that a party “shall give the auditor general the information regarding its powers, duties, activities, organization, financial transactions and methods of business” as necessary for the auditor to perform his or her duties.
Subsection 10.2 further states that the auditor “is entitled to have free access to all books, accounts, financial records, electronic data processing records, reports, files, and all other papers, things, or property.”
The final subsection in the amendment provides that “a disclosure to the auditor general under subsections one or two does not constitute a waiver of solicitor-client privilege, litigation privilege, or settlement privilege.”
The auditor general’s attorney, Richard Dearden, argued that solicitor-client privilege is not absolute, but it can be “limited or abrogated by statute.”
He submitted that Section 10 of the 2004 amendment “explicitly confirms the auditor general has a right to access privileged information” because of the inclusion of subsection 10.3. In other words, the entire section is meant to be read as a whole.
“Yes, it could have been clearer – no argument there,” said Dearden.
“But the legislature chose to add subsection 10.3. What else could they mean than disclosing any information or document to the auditor general that is subject to solicitor-client privilege?”
He added that the legislature provides for the disclosure of privileged information because there are a number of “safeguards” built into the act.
As an example, Dearden referred to subsection 27.13, which states that “a person required to preserve secrecy … shall not disclose any information or document disclosed to the auditor general under Section 10 that is subject to solicitor-client privilege.”
The attorney said that Laurentian University president Robert Hache’s interpretation that disclosure of privileged information is meant to be voluntary is “unreasonable.”
“Subsection 10.1 is a mandatory disclosure obligation. It says every grant recipient shall give the auditor general information. Shall give,” said Dearden.
“And 10.2 confers an entitlement, a right, of the auditor general to have free access to all the books and other records that are delineated in that subsection.”
In response, Laurentian University’s attorney, Brian Gover, said “the only question” in this application is whether Section 10 requires subjects to disclose privileged information.
“Everyone has the right to consult with their lawyers in private. Privilege is a fundamental civil and constitutional right. It is a principle of fundamental justice,” he said.
Gover added that any exceptions to that principle must be “rare, narrow, and justified by absolute necessity.”
“It has been determined that privilege cannot be abrogated except by legislative language that is clear, explicit, and unequivocal,” said Gover.
“The language of Section 10 does not disclose an intention, let alone a clear and explicit intention, to abrogate privilege.”
Gover said the auditor general claimed that Laurentian must provide her with “everything – including my emails, memoranda, and opinions to my client.”
“The auditor general says that she needs all of this so she can use it to inform her audit. That is not what the legislature intended in Section 10,” he said.
“Section 10, properly interpreted, allows for but does not require production of privileged information. It provides protection where privileged information is disclosed.”
He added that subsection 27.13 does the same thing.
Mandatory disclosure, said Gover, would increase the likelihood of a breach of privacy.
“It just takes one mistake for privileged information to be disclosed forever. I’m not questioning the sincerity of the auditor general’s staff,” he said.
“But we’ve all heard about data breaches or about electronic devices being misplaced.”
He also said that having access to privileged information would allow the auditor general to “reverse engineer” a report to use the privileged information to create a narrative that has the same effect as “disclosing the information directly.”
Gover said that solicitor-client privilege is not a “lawyer’s trick to avoid proper scrutiny” but rather a “critical civil right.”
“If doubt remains about the correct interpretation, it must be resolved in favour of upholding the privilege,” said Gover.
Gover said that if the court rules in Laurentian University’s favour, the institution will be asking for $25,000 in costs.
The auditor general is not seeking costs should it be successful on this application. By way of explanation, the auditor’s attorney said, “Laurentian University is in insolvency. It’s a publicly funded institution.”
Upon hearing the submissions on Monday, Superior Court Chief Justice Geoffrey Morawetz said he is taking the matter under reserve.
“I do thank both of you for some very complete submissions, both written and oral,” he said.
“I will endeavor to get to it as soon as possible.”
The Local Journalism Initiative is made possible through funding from the federal government.
dmacdonald@postmedia.com
Twitter: @SudburyStar
Colleen Romaniuk, Local Journalism Initiative Reporter, The Sudbury Star
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