Court documents detail standoff between Laurentian, auditor general, over insolvency audit

Sudbury -

A dispute between Laurentian University and the Auditor General's office boiled over last summer, with AG staff refusing to leave the university until they gained access to all the documents they were seeking.

At one point, Auditor General Bonnie Lysyk told LU it was committing an offence by not releasing all documents, regardless of whether they were covered by solicitor-client privilege.

According to court filings ahead of a December hearing on the issue, Laurentian objected to the AG's request to hand over more than 2.4 million emails dating back to 2015.

LU argued the emails, including from President Robert Haché, former president Dominic Giroux and other LU administrators, included privileged information. Laurentian said it would take years to comb through the emails to redact any private information.

The auditor also wanted access to minutes from all closed-door meetings held by university administrators, which the university said was also privileged.

Lysyk is conducting a forensic audit following LU's declaration of insolvency in February under the Companies' Creditors Arrangement Act. It was the first university to claim insolvency in Ontario's history.

Laurentian said it is cooperating with Lysyk but insists it does not have to surrender information that is covered by solicitor-client privilege. The AG argues that section 10 of Ontario's Auditor General Act authorizes her to receive any document she requires to complete her work.

That section of the Act says the auditor can access any information it requires, and that surrendering those documents "does not constitute a waiver of solicitor-client privilege, litigation privilege or settlement privilege."

On Aug. 11, staff from the auditor's office refused to leave Laurentian's IT department until it received the documents it was looking for. On the same day, Lysyk issued a summons to Haché, requiring the university to produce all the documents by Aug. 13 or face possible penalties.

But that request was withdrawn at a case conference Aug. 12 in front of Chief Justice Geoffrey B. Morawetz. Lawyers for the AG said while they still insist Lysyk has the right to access any document, "the auditor general has decided not to legally pursue the production of privileged documents and will conduct her audit using information and documents that she voluntarily receives from Laurentian University."

But the issue arose again Aug. 30, when the auditor wanted to interview Sara Kunto, the former secretary and general counsel at LU.

"I am requesting that the university inform Ms. Kunto that she can freely discuss all matters that will assist our value-for-money audit,” Lysyk wrote in a letter to the university.

"Dr. Haché responded to Ms. Lysyk’s letter on Aug. 31," the court transcript said. "His letter stated that Ms. Kunto could meet with the auditor general, but could not disclose privileged information."

Lysyk responded Sept. 8, saying "we require access to all privileged information, both documentary and from interviewees such as Sara Kunto."

Rather than trying to sanction the university, she said she would be applying to the court for a ruling on whether the Auditor General Act grants her access to privileged information.

That hearing is expected to be held the week of Dec. 6 or Dec. 13.

Read the full transcript here.