The Ontario Court of Appeal reaffirms that only a clear, explicit and unequivocal statutory provision can abrogate solicitor-client and litigation privilege

On May 1, 2023, in Ontario (Auditor General) v. Laurentian University,¹ the Ontario Court of Appeal followed the teachings of the Supreme Court of Canada set out in Blood Tribe² and Lizotte³ to conclude that the Auditor General Act⁴ (the “Act”) does not contain sufficiently clear, explicit and unequivocal language to abrogate solicitor-client, litigation and settlement privilege.

Background

In February 2021, Laurentian University, an entity receiving annual grants from the Government of Ontario, is unable to meet its financial obligations and enters creditor protection under the Companies’ Creditors Arrangement Act.⁵ The dispute between the parties arises when the Standing Committee on Public Accounts passes a motion requesting the Auditor General of Ontario to conduct a value-for-money audit on Laurentian University’s operations.⁶ As part of the audit, the Auditor General requests access to Laurentian University’s privileged information and records.⁷ The University refuses on the grounds that the Auditor General does not have the statutory authority to compel disclosure of documents subject to solicitor-client, litigation or settlement privilege.⁸

The debate revolves around the interpretation of sections 10 and 27.1 of the Act:

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. 

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.

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. 

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. 

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). 

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. 

The application judge, Chief Justice of the Ontario Superior Court of Justice, dismissed the Auditor General’s request for declaratory relief. He held, in light of sections 10 and 27.1(3), that the Act did not demonstrate a clear, explicit and unequivocal intent to abrogate solicitor-client, litigation and settlement privilege. In his opinion, therefore, the Auditor General does not have the authority to compel production of privileged documents and information.

The Ontario Court of Appeal (the “Court”), per the Honourable Michael H. Tulloch, upheld this decision.

Subsections 10(3) and 27.1(3) of the Act do not clearly preclude the application of privilege and may instead have been intended to maintain it in the event of voluntary or accidental disclosure

The Court rejected the Auditor General’s argument that a reading of subsection 10(3) along with 27.1(3) of the Act demonstrates a clear, explicit and unequivocal legislative intention to permit compelled disclosure of privileged documents since subsection 10(3) provides that disclosure to the Auditor General under subsections 10(1) and (2) does not constitute a waiver of privilege, and subsection 27.1(3) states that employees of the Office of the Auditor General are bound to secrecy with respect to privileged information and documents.

The Court noted that this reasoning erroneously broadens the scope of paragraph 61 of Lizotte,⁹ where the Supreme Court writes: “First of all, the legislature does not necessarily have to use the term ‘solicitor‑client privilege’ in order to abrogate the privilege. An abrogation can be clear, explicit and unequivocal where the legislature uses another expression that can be interpreted as referring unambiguously to the privilege.” The Court also noted that the legislature cannot abrogate privilege by inference.¹⁰ Finally, the Court accepted Laurentian University’s argument that it is plausible that the legislative intention behind subsections 10(3) and 27.1(3) of the Act was to safeguard solicitor-client, litigation and settlement privilege in the event of voluntary or inadvertent disclosure of privileged documents.¹¹ Since there are other plausible ways of interpreting the provisions, section 10 of the Act is therefore not sufficiently clear, explicit and unambiguous to abrogate privilege.¹²

Extrinsic evidence does not support the Auditor General’s position

The Court concluded that, contrary to the Auditor General’s position, the Hansard debates did not support her contentions, as they contain no discussion of abrogation of privilege.¹³

The Court further stated that the application judge was able to refer to legislation enacted contemporaneously with the Act to guide his interpretation of the Act.¹⁴ It noted that while this extrinsic evidence is not in itself sufficient to provide a basis for interpreting section 10 of the Act, it nevertheless favoured Laurentian University’s position.¹⁵

New provisions coming soon?

Ontario lawmakers could respond quickly to the Court’s decision: since the Ontario Superior Court of Justice decision, a bill to amend the Act has been tabled in the Legislative Assembly of Ontario and has passed first reading.¹⁶ Its stated purpose is to preclude any right of privacy, confidentiality or privilege that might interfere with a request by the Auditor General for access or disclosure, and it contains language that could not be clearer, more explicit or more unequivocal:

1 Subsections 10 (1) and (2) of the Auditor General Act are repealed and the following substituted:

Duty to furnish information
(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, even if the information or documents are confidential or subject to solicitor-client privilege, litigation privilege or settlement privilege.

Access to records
(2) Despite any other rights of privacy, confidentiality or privilege, including solicitor-client privilege, litigation privilege, settlement privilege and public interest immunity, 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.

The authors are grateful to law student Alexandra Gévry for her invaluable contribution to this article.

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¹ 2023 ONCA 299.
² Canada (Privacy Commissioner) v. Blood Tribe Department of Health, 2008 SCC 44.
³ Lizotte v. Aviva Insurance Company of Canada, 2016 SCC 52.
⁴ R.S.O. 1990, c. C-A. 35.
⁵ 2023 ONCA 299, paras. 8-9.
⁶ 2023 ONCA 299, para. 10.
⁷ 2023 ONCA 299, paras. 3 and 11.
⁸ Ibid.
⁹ 2023 ONCA 299, para. 31.
¹⁰ 2023 ONCA 299, paras. 31–32. See also para. 35.
¹¹ 2023 ONCA 299, paras. 33–35.
¹² 2023 ONCA 299, para. 35.
¹³ 2023 ONCA 299, para. 28.
¹⁴ 2023 ONCA 299, para. 36.
¹⁵ Ibid.
¹⁶ https://www.ola.org/en/legislative-business/bills/parliament-43/session-1/bill-19.