Auditor general not entitled to access privileged information for audit of Laurentian University, judge rules

Ontario's auditor general isn't entitled access to privileged information in her work to perform an audit of insolvent Laurentian University, according to a decisionreleasedWednesday.

Chief Justice Geoffrey Morawetz of the Superior Court of Justice said the section of the Auditor General Act under scrutiny in this rulingdoes not require audit subjects to give information and records that are subject to solicitor-client privilege, litigation privilegeor settlement privilege.

In a statement filed to the court in previous documents, Laurentian listed the wide range of documents the auditor general has been seeking:

• All in-camera briefing packages for the board of governors and its committees from 2010 to present.
• All emails from 2013 to present of various university staff, including its former general counsel (until July 2021), its current presidentand its former presidents.
• The entire electronic storage areas of various university departments, including legal/general counsel, corporate secretaryand board of governors.
• All emails between Laurentian personnel and with the domain sudburylaw.com, which is a law firm that has clients who are employed at the university.

Laurentian University declaredinsolvency Feb. 1, 2021, under the Companies' Creditors' Arrangement Act (CCAA), that would mean the university could continue to operatewhile sorting out its finances.

In a statement, the school said Wednesday's decisionprovides welcome clarification regarding what information and documents the auditor general may access.

It also saidit's co-operating as fully as it can with the auditor general.

"Laurentian has authorized and encouraged all staff to participate in interviews with the auditor general of Ontario, provided no privileged information is relayed. We have also granted her office direct access to our entire financial database, enrolment system, as well as a substantial volume of other non-privileged documentation covering many decades," Laurentian said.

"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."

It saidit's optimistic about the university's future.

"Especially in light of the province's package of support announced last month, we remain confident that Laurentian will emerge as a fully restructured, financially viable, and renewed Laurentian University for the long term."

'Continue doing our work'

Auditor General Bonnie Lysyk said she plans to appeal the decision.

"It's very disappointing that an insolvent university, and one that's part of the broader public sector who has received over $400 million from the province, has chosen to fight my office and, in turn, fighting the Legislative Assembly, instead of being transparent and accountable," she said.

"Typically, we receive the information we request. We respect privileged information."

Lysyk said privileged information her office receives is kept confidential, andLaurentian will be able to review her final report before it's made public to request any adjustments.

"We've always been willing to work with Laurentian University on that," she said.

"But that hasn't necessarily been the case in reverse."

Lysyk said her office will continue to move forward to work on the audit.

"We'll continue doing our work and to seek access to information," she said.

"Our objective is to provide an answer to the citizens of Sudbury as well as to the Legislature who requested us to do this work of what happened at Laurentian and recommendations going forward to prevent other universities from ending up in the same situation."

'Understanding the facts'

Jamie West, the New DemocratMPP for Sudbury, said people in the community are frustrated by this situation.

"There are a lot of people who don't understand how we got here, which is the intent of this audit," he said.

"It has gone from frustration to people quite literally hating this process. This insolvency process has really divided the community. People have become so hateful and bitter about it that we really need to understand what happened so we can continue to get out of this process and rebuild Laurentian to what we want it to be."

West said it's important the audit move forward as it will provide answers.

"It has nothing to do with hurting Laurentian," he said.

"It's about understanding the facts, understanding what happened, how we got here and how to prevent this from happening at other universities."

West said people in the community want this to move past this stage.

"They really want to move to the next step which is rebuilding and ensuring that Laurentian is successful," he said.

"Having it not be successful is the last thing everybody wants, including myself. We want Laurentian to be successful. We really need that transparency in order to have the community rally behind Laurentian to ensure that success."

Speaker's warrant a separate process

The judge's ruling deals only with the application brought forward by the auditor general and is not to be confused with the Speaker's warrant issued by the Legislature to compel Laurentian to disclose privileged documents by Feb.1.

It is a separate proceeding, but also seeks to force Laurentian to disclose privileged information.

Laurentian is fighting it too,and asking the courts to stay the execution of the warrant.

Lawyers have argued in court documents that the auditor general has been working "secretly" with the Legislative Assembly to evade the court process and it doesn't have jurisdiction over the university.

Lawyers for the auditor general replied in theirown statement of factsfiled Wednesday, callingthe claims "unfounded".

They also argue the university is answerable to the auditor because it is part of the broader public sector and Laurentian has received on average $85.9 million a year from the Ontario government, or45 per centof its annual revenue.

The Speaker of the Legislative Assembly and the attorney generalfiled statement of facts in response to Laurentian's request for a stay of the execution of the Speaker's warrant.

Both are requestingthat the court dismiss Laurentian's motion for a stay.

Lawyers for the Speaker argue the courts don't have the power to stay an action ordered by the Legislative Assembly.

"The assembly's power to 'send for persons, papers and things'is a centuries-old parliamentary privilege. It continues to be necessary to the assembly's constitutional role. This court has no jurisdiction over the exercise of this aspect of privilege in this, or any other case. Indeed, in keeping with the fundamental tenets of democracy, accountability for the assembly's exercise of its privilege rests with the electorate. As a result, this court does not have jurisdiction to grant the relief sought on this motion. The motion should be dismissed."

Lawyers for the attorney general saythe courts don't have the power to stay the warrant in this case.

"This court has jurisdiction to determine whether the assembly has the power to compel the production of privileged documents from a public body. But it does not have the jurisdiction to determine whether the use of those powers is appropriate in this particular case. Nor does it have the jurisdiction to stay presumptively valid Speaker's warrants absent a finding that the privilege on which they are based does not exist."

The Speaker is asking for the matter to return to court Jan, 18.

The attorney general says if the motion isn't dismissed, a hearing should be held as soon as possible, or at least before the assembly returns Feb. 22.