Ontario (Auditor General) v. Laurentian University

Ontario (Auditor General) v. Laurentian University Collection Decisions of the Court of Appeal Date 2023-05-01 Neutral citation 2023 ONCA 299 Docket numbers C70333 Judges Tulloch, Michael H.; Thorburn, Julie; George, Jonathon C. Subject Civil Decision Content COURT OF APPEAL FOR ONTARIO CITATION: Ontario (Auditor General) v. Laurentian University, 2023 ONCA 299 DATE: 20230501 DOCKET: C70333 Tulloch, Thorburn and George JJ.A. BETWEEN Auditor General of Ontario Applicant (Appellant) and Laurentian University of Sudbury Respondent (Respondent) Richard Dearden, Heather Fisher and Caitlin Schropp, for the appellant Fredrick Schumann and Yadesha Satheaswaran, for the respondent Cynthia L. Spry and Michael R. Bookman, for the intervener The Advocates’ Society Heard: November 15, 2022 On appeal from the judgment of Chief Justice Geoffrey B. Morawetz of the Superior Court of Justice, dated January 12, 2022, with reasons reported at 2022 ONSC 109. Tulloch J.A.: A. OVERVIEW [1] This appeal involves the interpretation of s. 10 of the Auditor General Act, R.S.O. 1990, c. A.35 (the “Act”), and the question of whether it confers on the Auditor General of Ontario authority to access and compel disclosure of privileged information and documents from a grant recipient. [2] The appeal arises out of a value-for-money audit of the respondent, Laurentian University of Sudbury (“Laurentian University”) by the appellant, the Auditor General. [3] As part of the audit, the Auditor General sought production of Laurentian University’s privileged information and records. However, Laurentian University declined this request on the basis that the Auditor General does not have the right to access these documents. [4] In response, the Auditor General brought an application for a declaration that the Act grants the authority to pierce solicitor-client, litigation, and settlement privilege. [5] The application judge resolved the application in favour of Laurentian University, as he determined that the Act does not demonstrate a “clear and unambiguous intent to abrogate solicitor-client privilege”. The Auditor General now appeals that decision. [6] For the reasons that follow, I would dismiss the appeal. B. BACKGROUND FACTS [7] The Auditor General is an Officer of the Legislative Assembly of Ontario. The Office of the Auditor is an independent, non-partisan Office of the Legislative Assembly of Ontario that serves the Members of Provincial Parliament and the people of Ontario. [8] Laurentian University is a grant recipient that has received annual grants from the Government of Ontario. [9] Laurentian University entered creditor protection under the Companies’ Creditors Arrangement Act (“CCAA”), R.S.C. 1985, c. C-36, having advised the court that it was insolvent, unable to meet payroll obligations in February 2021, and was facing a liquidity crisis. [10] In response to Laurentian University’s CCAA application, the Standing Committee on Public Accounts passed a motion requesting the Auditor General to conduct a value-for-money audit on Laurentian University’s operations from the period of 2010 to 2020. [11] As part of the audit, the Auditor General requested access to Laurentian University’s privileged documents. This access was denied, as Laurentian University took the position that the Auditor General did not have the authority to compel production of such documents. C. Decision Below [12] The Auditor General filed an application for a declaration that every grant recipient is required to give the Auditor General the information and records described in s. 10(1) of the Act, including privileged information. The Auditor General sought a further declaration that it has a right to free and unfettered access to information and records described under s. 10(2) of the Act that are subject to privilege. [13] For the purposes of this appeal, the relevant provisions of the Act are ss. 10 and 27.1, which are as follows: Duty to furnish information 10 (1) Every ministry of the public service, every agency of the Crown, every Crown controlled corporation and every grant recipient shall give the Auditor General the information regarding its powers, duties, activities, organization, financial transactions and methods of business that the Auditor General believes to be necessary to perform his or her duties under this Act. 2004, c. 17, s. 13. Access to records (2) The Auditor General 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 belonging to or used by a ministry, agency of the Crown, Crown controlled corporation or grant recipient, as the case may be, that the Auditor General believes to be necessary to perform his or her duties under this Act. 2004, c. 17, s. 13. No waiver of privilege (3) A disclosure to the Auditor General under subsection (1) or (2) does not constitute a waiver of solicitor-client privilege, litigation privilege or settlement privilege. 2004, c. 17, s. 13. … Duty of confidentiality 27.1 (1) The Auditor General, the Deputy Auditor General, the Advertising Commissioner, the Commissioner of the Environment appointed under section 50 of the Environmental Bill of Rights, 1993, each employee of the Office of the Auditor General and any person appointed to assist the Auditor General for a limited period of time or in respect of a particular matter shall preserve secrecy with respect to all matters that come to his or her knowledge in the course of his or her employment or duties under this Act. 2004, c. 17, s. 28; 2004, c. 20, s. 13(7); 2018, c. 17, Sched. 3, s. 5. Same (2) Subject to subsection (3), the persons required to preserve secrecy under subsection (1) shall not communicate to another person any matter described in subsection (1) except as may be required in connection with the administration of this Act or any proceedings under this Act or under the Criminal Code (Canada). 2004, c. 17, s. 28. Same (3) A person required to preserve secrecy under subsection (1) shall not disclose any information or document disclosed to the Auditor General under section 10 that is subject to solicitor-client privilege, litigation privilege or settlement privilege unless the person has the consent of each holder of the privilege. 2004, c. 17, s. 28. [14] The application judge observed that solicitor-client privilege is a “civil right of supreme importance” that must “remain as close to absolute as possible” to be effective. The application judge held that while privilege can be abrogated by statute, the language of any statutory provision must be explicit and demonstrate a clear and unambiguous intent to do so, citing Alberta (Information and Privacy Commissioner) v. University of Calgary, 2016 SCC 53, [2016] 2 S.C.R. 53, at para. 17. Furthermore, open-textured language will not be read to include privileged information: Canada (Privacy Commissioner) v. Blood Tribe Department of Health, 2008 SCC 44, [2008] 2 S.C.R. 574, at para. 11. [15] As such, the question was whether ss. 10 and 27.1(3) of the Act demonstrated a clear, explicit, and unambiguous intention to abrogate solicitor-client, litigation, and settlement privilege. The application judge ultimately concluded that it did not. [16] The application judge first looked to the legislative history. In 2004, Bill 18 amended the existing Audit Act, R.S.O. 1990, c. A.35, to include ss. 10(3) and 27.1(3). There were three prior attempts to amend the Audit Act, none of which expressly referred to privilege or contained any provision resembling the current s. 10(3). After reviewing the Hansard debates on Bill 18 when it was introduced, the application judge concluded that Bill 18 was understood to be substantively similar to the previous bills, and that there was no reference to any intention to abrogate privilege. Consequently, the legislative history of ss. 10(3) and 27.1(3) suggested that the legislature did not intend to give the Auditor General authority to compel the production of privileged documents. [17] The application judge also rejected the Auditor General’s arguments based on extrinsic aids. These aids included the 2003 Interim Protocol on Access by the Office of the Provincial Auditor of Ontario to Privilege Documents (the “2003 Interim Protocol”), which provided that the Auditor General could have access to all documents subject to solicitor-client privilege, litigation privilege or settlement privilege required by the Provincial Auditor to perform his or her duties under the Audit Act. However, the application judge noted that the 2003 Interim Protocol predated the 2004 amendments to the Audit Act. Moreover, the comments in the 2003 Interim Protocol are not reflected in Bill 18. [18] The application judge then turned his attention to the wording of ss. 10 and 27.1(3) of the Act. He noted that ss. 10(1) and (2) do not mention privilege. Thus, the application judge stated that, “at best [they] are general disclosure provisions that cannot be interpreted as authorizing the Auditor to access or compel the disclosure of privileged information.” While ss. 10(3) and 27.1(3) expressly referred to privilege, the application judge was not satisfied that these references were sufficient to read in an abrogation of privilege. Instead, he reasoned that there could be situations where privileged documents are disclosed inadvertently or with the consent of the privilege holder, and these sections in the Act ensured that such disclosure would not waive privilege. In other words, neither ss. 10(3) and 27.1(3) would be rendered meaningless if, when read in conjunction with ss. 10(1) and (2), they did not compel the disclosure of privileged information. [19] The Auditor General’s argument relied heavily on the text of s. 10(3): “disclosure to the Auditor General under subsection (1) or (2)”. The Auditor General submitted that since ss. 10(1) and (2) create mandatory duties of disclosure, and s. 10(3) references both subsections, this means that s. 10 of the Act mandates the disclosure of privileged documents. However, this interpretation was rejected by the application judge because “it requires reading into the statute something that is not expressly stated”, and therefore violates the principles of interpretation in Blood Tribe. [20] Furthermore, where the legislature intends to abrogate privilege, it does so with clear and express language. The application judge cited the following examples of other provisions which include explicit language to abrogate privilege: the Law Society Act, R.S.O. 1990, c. L.8, s. 49.8(1), the Health Insurance Act, R.S.O. 1990, c. H. 6, s. 43.1(6), the Archives and Recordkeeping Act, 2006, S.O. 2006, c. 34, Sched. A, s. 8(6), and Nova Scotia’s comparable Auditor General Act, S.N.S. 2010, c. 33, s. 14(1). He also accepted Laurentian University’s submission that it would be inexplicable if s. 10 required disclosure of privileged documents, while the Auditor General’s summons power under s. 11 of the Act did not. [21] The application judge thus resolved the application in favour of Laurentian University, issuing a declaration that s. 10 does not abrogate solicitor-client, litigation, and settlement privilege. D. Issue [22] The Auditor General raises several grounds of appeal, all of which can be distilled into the following overarching question: does s. 10 of the Act allow the Auditor General to abrogate privilege? [23] In my view, the application judge did not err in finding that the Act fails to evince the clear, explicit, and unequivocal legislative intention necessary to abrogate privilege. Accordingly, I would dismiss the appeal. E. ANALYSIS [24] It is well-established that privilege is sacrosanct. In its modern form, solicitor-client privilege is not merely a rule of evidence, but an important civil and legal right as well as a principle of fundamental justice in Canadian law: University of Calgary, at para. 41. The obligation of confidentiality that arises from the duty of solicitor-client privilege is necessary for the preservation of trust between a lawyer and their client, which is in turn necessary for the continued existence of our legal system: Blood Tribe, at para. 9. [25] Litigation privilege is also fundamental to the proper functioning of our legal system: Lizotte v. Aviva Insurance Company of Canada, 2016 SCC 52, [2016] 2 S.C.R. 521. As explained by the Supreme Court of Canada in Lizotte, at para. 64, “the Canadian justice system promotes the search for truth by allowing the parties to put their best cases before the court, thereby enabling the court to reach a decision with the best information possible” (citations omitted). In turn, parties are only able to confidently develop their litigation strategies with the reassurance that they cannot be compelled to disclose them: Lizotte, at para. 64. [26] Therefore, privilege must be safeguarded and protected. Our jurisprudence has established that “privilege cannot be abrogated by inference”, and “[o]pen-textured language governing production of documents will be read not to include solicitor-client documents” (emphasis in original): Blood Tribe, at para. 11; see also University of Calgary, at para. 76; Lizotte, at para. 59. Privilege can only be set aside by legislative language that is “clear, explicit, and unequivocal”: University of Calgary, at para. 2; Lizotte, at paras. 59 and 63. [27] In my view, the application judge correctly articulated and applied the test for abrogating privilege set out in Blood Tribe. However, the Auditor General submits that the application judge erred in law in several respects. I shall address each argument below. [28] To begin, the Auditor General submits that the application judge erred in holding that the 2003 Interim Protocol and the Hansard debates did not assist in the interpretation of s. 10 of the Act. I disagree. The application judge had found that Bill 18, which amended the Audit Act in 2004 to include ss. 10(3) and 27.1(3), did not include any reference to the 2003 Interim Protocol. Similarly, there was no discussion about the abrogation of privilege in the Hansard debates on Bill 18. Instead, the debates showed that Bill 18 was understood as being substantively the same as the predecessor bills that had been introduced in the previous years. None of them had referred expressly to privilege. This led the application judge to conclude that neither the legislative debates nor the 2003 Interim Protocol were of assistance to the Auditor General. I see no error in his approach and would dismiss this ground of appeal. [29] The Auditor General also submits that according to Lizotte, “an abrogation can be clear, explicit and unequivocal where the legislature uses another expression that can be interpreted as referring unambiguously to the privilege”: at para. 61. The Auditor General argues that, when s. 10 is read in its entirety and in the context of the Act as a whole, s. 10 clearly and unambiguously abrogates privilege. The text in s. 10(3), “under subsection (1) or (2)”, inextricably links s. 10(3) to an auditee’s mandatory disclosure duties under ss. 10(1) and (2). In other words, the legislature had intended s. 10(3) to safeguard privileged documents which were mandatorily disclosed. The Auditor General points to s. 27.1(3) as further support for this interpretation because s. 27.1(3) similarly imposes a secrecy obligation on the Office of the Auditor General and its employees over any privileged information disclosed under s. 10. [30] I note that this is substantively the same argument that the Auditor General made before the application judge. In my view, the application judge was correct to not give effect to it, for two reasons. [31] First, it is important not to take the above statement from Lizotte regarding “other expressions” out of context. This statement was made in relation to a discussion about whether using another term other than “solicitor-client privilege” can, in certain instances, abrogate privilege. The Supreme Court of Canada held that “the legislature does not necessarily have to use the term ‘solicitor‑client privilege’ in order to abrogate the privilege”: Lizotte, at para. 61. However, this statement was not meant to usurp the principle set out in Blood Tribe, at para. 11, that “privilege cannot be abrogated by inference.” Indeed, the Supreme Court of Canada reiterates this principle numerous times in Lizotte. [32] Determining if there is another expression which unambiguously refers to privilege is a separate and distinct matter from making multi-leveled inferences about how provisions in a statute allow for the abrogation of privilege. In the present case, the Auditor General is not arguing that there is another expression in s. 10 which unambiguously refers to privilege. Rather, the Auditor General asks this court to infer that, because of the interplay between ss. 10(1), (2), (3) and 27.1(3), the Auditor General has the power to compel the production of privileged documents. As noted by the application judge, this would require reading into the statute something which is not expressly there, contrary to the principles in Blood Tribe. [33] Second, even if I were to apply the rule from Lizotte, I am not persuaded that ss. 10 and 27.1(3) “unambiguously” refer to the abrogation of privilege. I agree with the application judge that another plausible way to interpret ss. 10(3) and 27.1(3) is that the legislature created these safeguards to protect privileged documents which were either inadvertently disclosed or disclosed with the consent of the privileged holder. [34] I accept Laurentian University’s argument that there are sound policy reasons why the legislature would want to allow, but not require, the disclosure of privileged information to the Auditor General without it resulting in a waiver of privilege. For example, if an auditee has entered into an expensive settlement, it may want to disclose privileged advice to the Auditor General in order to justify its use of public funds. However, the auditee may be reluctant to do so, out of concern that such disclosure may amount to a waiver of privilege against third parties. Subsections 10(3) and 27.1(3) protect against this, and therefore encourage the disclosure of privileged documents. Similarly, it is not difficult to imagine situations where privileged documents are accidentally disclosed alongside other documents that were mandatorily compelled under ss. 10(1) and (2). In those cases, ss. 10(3) and 27.1(3) would safeguard against waiver of privilege, therefore mitigating the consequences of such inadvertence. [35] In sum, I agree with the application judge that ss. 10(3) and 27.1(3) would not be rendered meaningless if they were not interpreted to compel disclosure of privileged information. As there are other plausible ways to interpret these provisions, s. 10 of the Act falls short of evincing the clear, explicit. And unequivocal legislative intention necessary to abrogate privilege. [36] The legislature has also demonstrated that where it truly intended to abrogate privilege, it has done so in express language. I see no error in the application judge’s reliance on other statutes that were enacted over the same timeframe as the Act, including the Law Society Act and the Health Insurance Act, for guidance on this matter. While this extrinsic evidence, standing alone, is not sufficient to ground the application judge’s interpretation of s. 10 of the Act, it does weigh in favour of Laurentian University’s position. [37] Finally, the application judge noted that interpreting s. 10 of the Act to abrogate privilege would be inconsistent with the summons powers in s. 11, which provides that the “Auditor General may examine any person on oath on any matter pertinent to an audit or examination under this Act.” The Auditor General had earlier conceded that the summons power cannot be used to compel privileged information. Consequently, for the application judge, it would be “inexplicable” if the Auditor General was able to compel disclosure of privileged documents during an audit, but unable to do so during an “escalated means of investigation”. [38] The Auditor General submits that the application judge erred in this finding, because s. 11 is a standalone provision with a broader scope. While the Auditor General’s power to compel documents under s. 10 are limited to auditees – that is, grant recipients, ministries of the public service, agencies of the Crown, and Crown controlled corporations – the s. 11 summons power applies to “any person”, which can include third parties external to the auditee. It is therefore incorrect to compare the two provisions, as they are different powers. [39] In my view, it is unnecessary to decide this issue. Even if the application judge had not considered s. 11, I am satisfied that, for the reasons articulated above, s. 10 does not have the sufficient clear, explicit, and unambiguous language required to abrogate privilege. F. dISPOSITION [40] I would dismiss the appeal. In accordance with the parties’ agreement, there will be no costs ordered. Released: May 1, 2023 “M.T.” “M. Tulloch J.A.” “I agree. Thorburn J.A.” “I agree. J. George J.A.”