Ontario's auditor general doesn't have the power to demand privileged documents, court rules

Generic gavel (filed)

Sudbury -

A court has ruled that Ontario's Auditor General Act does not give the auditor the power to demand access to documents covered by lawyer-client privilege.

Since last summer, Auditor General Bonnie Lysyk has been embroiled in a dispute with Laurentian University over access to privileged information as she conducts a value-for-money audit of the insolvent institution.

Lysyk went to court to argue that wording in the legislation compelled audit subjects to hand over all documents, and allow her to interview anyone she wants, including LU's former lawyer.

Laurentian responded by saying the act gives them the option to hand over the documents, but doesn't compel them.

While a victory for the university, the same court has yet to rule on a Speaker's warrant issued by the Ontario legislature demanding LU hand over all the information Lysyk is seeking.

But in the decision released Tuesday, Superior Court Chief Justice G.B. Morawetz ruled that, while legislation can compel audit subjects to hand over privileged information, the legislation has to be clear and unambiguous.

Morawetz wrote that past court rulings have said lawyer-client privilege is one of the pillars of the Canadian justice system.

"Further, to remain effective, it 'must remain as close to absolute as possible and should not be interfered with unless absolutely necessary,'" he wrote in his decision.

While the act has language that covers how the auditor general must handle privileged documents, it doesn't explicitly give her the power to demand the information.

"The question for determination is whether … the act demonstrates a clear, explicit, and unambiguous intention to abrogate solicitor-client privilege, litigation privilege, and settlement privilege," Morawetz wrote.

"To state the obvious, the legislature could have adopted the route followed by the province of Nova Scotia and enacted legislation that clearly expressed an unambiguous intention to abrogate solicitor-client privilege. It did not do so."

The way the language in the act is written covers how lawyer-client information should be handled, the judge said, but does not discuss the power of the auditor general to demand that information.

To accept arguments from the auditor general's office "requires reading into the statute something that is not expressly stated," Morawetz said.

While dismissing the motion, the judge said he wasn't ruling on Laurentian's arguments that a law requiring them to hand over the information would violate Canada's constitution.

"It is not necessary for me to address this issue," Morawetz said, adding that Laurentian had not taken the required steps for a ruling on a constitutional issue.

In a statement, Laurentian welcomed the decision.

"We will continue to provide the auditor general with the documentation and non-privileged information she needs, and is entitled to receive, in order to perform her audit," the release said.

The school also refuted suggestions by Lysyk that it had created "a culture of fear" when it comes to dealing with the audit.

"Laurentian has authorized and encouraged all staff to participate in interviews with the Auditor General of Ontario, provided no privileged information is relayed," the school said.

"We have also granted her office direct access to our entire financial database, enrollment system, as well as a substantial volume of other non-privileged documentation covering many decades."

For her part, Lysyk told CTV News she plans to appeal the decision, adding she's disappointed Laurentian has chosen to go to court to fight her attempts to complete her audit. She's concerned the way Laurentian is providing information is making it unclear whether non-privileged information is also being withheld.

Specifically, she said Laurentian is denying her full access to 2.4 million emails because some of them may contain privileged information, and offered to search the emails using search terms Lysyk provides.

That's unacceptable, she said, because organizations being audited aren't allowed to pick and choose what information they provide -- they are supposed to provide all information the auditor requires to complete her work.

In addition to siding with LU, Morawetz also awarded the university $25,000 in legal costs.  Read the full decision here.