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British Columbia (Auditor General) v.British Columbia (Attorney General) Page 4

typically submitted statements of account, signed and certified by their client,to a named Government lawyer who reviewed the accounts and arranged forpayment of the appropriate amounts to the lawyer. (Government Response,paras. 44-47; Butler Affidavit #1, para. 2)

26. Some LRAs have required the lawyer for the indemnified person toprovide redacted accounts to the Government for payment. (GovernmentResponse para. 30; Butler Affidavit #1, para. 2., Ex "D", ss. 5.04 and14.01(2), Ex "G", ss. 6.03 and 6.04; Romeo-Beehler Affidavit #1, Ex "O",ss. 5.04 and 14.01(2), Ex "P", s. 14(1))

27. In some instances (particularly in relation to older indemnities)unredacted accounts were provided to Government and the indemnifiedperson then certified that he or she had received the legal services describedin the account. (O'Donnell Affidavit # 1, paras. 9 to 11, Ex "B-3" and "C-3")

28. In certain instances, the Government also entered into a reviewagreement with an independent lawyer for him or her to review the legal

accounts of the lawyer for the indemnified person. When an independentreview arrangement was in place the reviewer certified the amount of feesand disbursements and the Government received the Certificate, a redactedaccount and supporting disbursement invoices. (Petition, para. 101; Dodds

Affidavit #1, para. 2; Government Response, paras. 27-28, Butler Affidavit #1,para. 2). The provisions in the reviewer agreements are discussed in moredetail in Parts III.B and III.E of this Argument.

29. Although only a limited number of Special Indemnities have involvedreview agreements, two of those concerned the legal defence expenses ofthe respondents Udhe Singh (Dave) Basi and Bobby Singh Virk in criminalproceedings against them (the Basi/Virk Criminal Proceedings). ThePetitioner's initial interest in Special Indemnities was in relation to the defencelegal expenses paid for by the Government respecting the Basi/Virk CriminalProceedings. (Butler Affidavit #1, Ex "H"; Romeo-Beehler Affidavit #1, Ex "L",paras, 34-35 (Reasons of Greyell J.))

[8] The Auditor General announced the Indemnities Performance Audit in July2011. According to his submissions:

52. The Indemnities Performance Audit will consider the effectiveness ofthe system or framework governing the granting and administration of SpecialIndemnities and whether the terms and conditions of the indemnities granted

by Government have been complied with. The audit will consider if access to,administration of, and reporting on the indemnities are undertaken in a fairand transparent way.

53. The Auditor General has concerns over an apparent lack of adequatecontrols over the public funds expended under the authority of SpecialIndemnities, as well as an apparent lack of transparency around thedecisions made about who receives the indemnity and the extent of theobligations assumed.


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54. In order to conduct the Indemnities Performance Audit, the AuditorGeneral requires access to all information, including billing information, thatrelates to all Special Indemnities. In that some of the information sought maybe subject to a claim of solicitor-client privilege on behalf of the individual

indemnitees, the information has not been provided to the Auditor General bythe Ministry of Attorney General except where the indemnitee has provided aconsent or waiver allowing access.

[9] The Auditor General from the outset has taken the view that his constatingstatute gives him the authority to access all relevant documents (and persons)

without limitation, in particular, regardless of the fact that the targets might enjoy

solicitor-client privilege in the documents or other evidence pursued.

[10]

When I use the phrase solicitor-client privilege in these reasons, I amreferring to legal advice privilege (see Blank v. Canada (Minister of Justice), 2006

SCC 39, [2006] 2 S.C.R. 319).

[11] While apparently wishing to co-operate in the Indemnities Performance Audit,the government has been properly cautious in ensuring that any privilege enjoyed by

third parties is appropriately respected.

[12] In respect of the Basi and Virk documents which the Auditor General haspursued, including, but not limited to, unredacted legal invoices from their defence

lawyers, and access to the independent reviewers (the respondents Ms. Harper and

Mr. Jones), who reviewed those accounts, this led to proceedings in this Court. The

matter came before Greyell J. He concluded (2011 BCSC 1064) that Mr. Basi and

Mr. Virk had waived privilege over the materials then in the hands of the

government. In the result, he ordered the government and its counsel (Mr. Richard

Butler) to produce to the Auditor General all information, records, etc. in the

governments custody or possession relating to the indemnification ofMr. Basi and

Mr. Virks legal fees in their prosecution. This included the redacted accounts and

disbursement receipts provided with the reviewers certificates.

[13] I note parenthetically that Mr. Butler initially indicated that the certificates fromthe reviewers did not attach the actual legal accounts, redacted or otherwise. In this


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(iii) HMTQ BC

[36] This respondent does not lead argument to maintain third party solicitor-clientprivilege as a limit on access to material and information under theAGA. It points out

its disclosure to date:

2. In particular, the Government

(a) has waived as against the Auditor General and his office theGovernment's own solicitor-client privilege in the documents, records,securities, things and/or information or communications (individuallyor collectively, the "Documents") sought by the Auditor General;

(b) has waived as against the Auditor General and his office Cabinetprivilege or confidentiality relating to the process of amendment of the

Government's indemnity policies, and has searched for and deliveredall Documents identified to date in that regard;

(c) has repeatedly advised the Auditor General that it is willing to providehim and his office with access to all Documents potentially subject tothird party solicitor-client privilege as soon as issues in that regard areresolved, and

(d) advised the Auditor General that the Attorney General intended tocommence its own proceedings under section 2 of theAttorneyGeneral Actfor a Court declaration to allow it to do so.

[37] In the end, the government submits that in these matters of access todocuments in the course of what can be conflicting mandates, co-operation should

be the rule and litigation the exception.

(iv) Sandra Harper

[38] Ms. Harper is in substantial agreement with the submissions of the AuditorGeneral. In particular, she notes the Auditor Generals submission that he cannot

simply rely on the work of the independent reviewers for the purpose of his review;

that he must have access to the unredacted invoices and the independent

reviewers. Ms. Harper submits that these paragraphs make sense to me.

[39] In the end, Ms. Harper does not oppose the granting of the relief claimed bythe Auditor General but urges:


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... that careful consideration be given to any terms that will protect theprivilege and yet still allow the Auditor General to conduct a full and completeaudit consistent with his statutory mandate.

[40] I note, however, as I will discuss below in my review of the cases, that theaccess sought by the Auditor General here represents a complete breach of the

solicitor-client privilege enjoyed by the third parties. One cannot protect the

privilege very effectively in light of this initial breach.

(v) John van Dongen

[41] Mr. van Dongen supports the submissions of the Auditor General. Hestresses the important role of the Auditor General in assisting members of the

Legislative Assembly in their efforts to ensure transparency and accountability in the

expenditure of public funds. Mr. van Dongen urges a purposive analysis of the

provisions of theAGA. At para. 25 of his submissions, he says:

25. The Intervenor respectfully submits that a purposive analysis of theAuditor General Actwill support the interpretation that the Auditor General isentitled to access to the lawyers bills paid pursuant to the legal fee indemnityagreements at issue in this case. The clear purpose of theAuditor General

Actis to enable the Legislature to receive complete, reliable and timely

information about government expenditures of public funds, includingexpenditures relating to indemnities, so that the principles of transparencyand accountability involved in our system of responsible government arefully respected.

[42] Mr. van Dongen makes an interesting submission based on s. 70 of the LegalProfessions Act, S.B.C. 1998, c. 9. That section permits the person charged or a

person who has agreed to indemnify that person to pursue the review of an account

for legal services. Mr. van Dongen submits (at para. 51 of his submissions):

51. It is respectfully submitted that it would be anomalous and absurd,having regard to the governments entitlement to compel a review of anindemnified persons legal bills in a public court process by a judicial officer,to give a narrow interpretation of theAuditor General Actwhich would preventhim from having access, under the conditions of confidentiality prescribed bysection 16 of his statute, to the very same legal invoices which would beattached to a public court filing.


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[47] An audit under theActis defined in s. 2 as an audit conducted inaccordance with generally accepted auditing and assurance standards.

[48] Importantly, s. 10(12) of theAGA provides that in s. 10 (except in s. 10(2)),auditor means an auditor of financial statements. This latter role is more limited

than the second role of the Auditor General in undertaking so-called performance

auditors or value for money audits.

[49] By s. 11(1), the Auditor General must report to the Legislative Assembly eachyear, in accordance with generally accepted auditing and assurance standards, on

the financial statements of the government reporting entity.

[50] By s. 11(6), the Auditor General may audit an individual or organization inrelation to an indemnity given by government, but pursuant to s. 11(7), that audit

must be limited to determining whether the terms and conditions of the indemnity

have been fulfilled. One must recall, however, that this audit is not subject to the

limited scope contemplated by s. 10(12) of theAGA.

[51] Section 11(8) is the primary source of the Auditor Generals authority toconduct performance audits, which, at their heart, examine whether in respect of a

particular matter, the government is operating economically, efficiently and

effectively. It provides:

Mandate

(8) The Auditor General must report to the Legislative Assembly one ormore times each fiscal year of the government and call attention to anythingresulting from the work undertaken to exercise the powers and perform theduties of the Auditor General that the Auditor General considers should bebrought to the attention of the Legislative Assembly, including any

assessments concerning whether(a) financial and administrative provisions of Acts and

regulations under those Acts have been complied with,

(b) the government, a government organization or a trustfund is operating economically, efficiently andeffectively,


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(c) the procedures established by the government,government organizations or trust funds to measureand report on the effectiveness of their programs areadequate and complied with,

(d) the accountability information provided to theLegislative Assembly by the government, governmentorganizations and trust funds with respect to the resultsof their programs is adequate,

(e) the terms and conditions applied in respect of a grant,a transfer under an agreement, an advance of money,a loan, a guarantee for the performance of anobligation, or an indemnity given by the government, agovernment organization or a trust fund to anyindividual or another organization have been compliedwith, and

(f) the terms and conditions applied in respect of acollection of money on behalf of the government, agovernment organization or by or on behalf of a trustfund have been complied with.

[52] Section 13 appears to buttress the Auditor Generals authority to conductperformance audits. It accords the Auditor General the discretion to undertake an

examination:

Other examinations

13 (1) The Auditor General may undertake an examination

(a) respecting government, a government organization ora trust fund, or

(b) in relation to a grant, a transfer under an agreement,an advance of money, a loan, a guarantee for theperformance of an obligation, or an indemnity given bythe government, a government organization or a trustfund.

[53] Examination is not a defined term and one must presume that it is abroader, or at least a different, undertaking than an audit and certainly a broader

undertaking than an audit of financial statements.

[54] I have already reproduced the powers in ss. 16 and17 for the Auditor Generalto access information. The Auditor General owes a duty of confidentiality in respect

of such information. It is cast in these terms in s. 9 of the AGA:


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Confidentiality

9 The Auditor General, or a person appointed or engaged undersection 8, must keep in confidence all information obtained in the exercise ofa power or in the performance of a duty of the Auditor General and must not

communicate this information to any person except

(a) in the course of the administration of an enactment, or

(b) in court proceedings.

[55] It is convenient here to deal with the submission of the Amicus to the effectthat the Auditor General does not have the authority to conduct the Indemnities

Performance Audit. Although this submission is quite nuanced, it is essentially

summarized in this paragraph of theAmicusssubmissions:

11. Section 13 has its own reporting provision in s. 13(4): A summary ofthe findings [not an opinion or an audit] ... resulting from examinationsundertaken under subsection (1) must be reported each year... Thisreporting provision does not speak to the assessments set out unders. 11(8) and, in particular, there is no provision authorizing or requiring areport as to whether the audited entity is operating economically, efficientlyand effectively. So if the Petitioner resiles from s. 11(6) and relies ons. 13(1), it is not clear that he is authorized to present a value for moneyreport.

[Emphasis in the original.]

[56] Because of the conclusion I have reached on the essential issue before me,that is, the scope of the s. 16 power, it is not necessary to decide this point.

However, I observe that while the examination of the indemnity from the perspective

of a recipient may be limited by s. 11(7) to the Auditor General determining whether

the terms and conditions ... of ... an indemnity ... have been fulfilled, it seems clear

that the Auditor General enjoys a wide power to examine and audit the government

side of the arrangement under at least s. 10(2) and s. 11(8), and to assess whether

it is, in respect of the Special Indemnities, operating economically, efficiently andeffectively.

[57] In this regard, I disagree with the submission of theAmicus to the effect thats. 10(2) is not empowering and that it is only an appointment provision. I conclude

that the Auditor Generals appointment as the auditor of a fund or appropriation


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to which the lack of evidence effects his or her planned assessment ofperformance. He or she may also decide to explain why required evidence isunobtainable.

8. In my opinion and with reference to paragraphs 35 and 59 of the

Petition, an Auditor General's difficulty in obtaining information does notprevent him from complying with Standards. He is directed by, and complieswith, Standards by explaining in his audit report to the Legislative Assembly,the effect of his inability to obtain required information or evidence on his orher findings and conclusions.

9. During an audit or subsequent to an audit, an Auditor General maythink he or she is likely to encounter similar difficulty in future audits, i.e.,difficulty with gaining access to or obtaining certain types of information, suchas third party solicitor client privileged information. In addition to reporting hisdifficulty with access to evidence, he or she may decide, using judgment andexperience, to take specific action to address the difficulty. For example, in

my opinion, an Auditor General may decide to:a. Ask the Government to work with him on developing a

process by which he is able to obtain all, or most of,the information he seeks either directly or indirectly.The process might include consultations with the LawSociety, relying on the opinions of experts, assessingwhether certain sensitive information is relevant to theaudit, ensuring sensitive information is carefullyprotected or not disclosed inadvertently, and/orensuring administrative fairness.

b. Ask the Legislative Assembly to direct the Governmentto provide the privileged information. This request maybe considered by legislators in a meeting of theStanding Committee on Public Accounts.

c. Ask the Court to confirm his authority to obtain theprivileged information and to order those with theinformation to provide it to the Auditor General. The

Auditor General is taking this action as set out in hisPetition.

d. Ask the Legislative Assembly to amend theAuditorGeneral Actto specifically and explicitly state the

Auditor General has the authority to obtain third partysolicitor client privileged information.

10. In this Report, I outline the alternative methods that Standardscontemplate when evidence is unobtainable. However, when the AuditorGeneral thinks he has exhausted those alternatives, he may take one ormore of the above actions. In my opinion, none of these actions affect the

Auditor General's ability to comply with Standards. However, they may affect,limit or impair his ability to serve the Legislative Assembly.


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[67] One must weigh the Auditor Generals position to the effect that access toprivileged documents is virtually an absolute necessity for a proper audit under the

AGA, with Mr. Strelioffs view (at para. 16 of his report):

16. Both Auditors General and private sector auditors must useconsiderable professional judgment to determine how best to apply theStandards to particular circumstances. For example, auditors know absoluteassurance is not attainable in an audit. Accordingly, both types of auditorsperform the work they judge required to provide a high, though not absolute,level of assurance in order to limit the risk of an inappropriate conclusion. Thegoal is to reduce risk to the lowest level practicable. Absolute assurance isnot attainable due to factors such as: the nature of the subject matterexamined; the use of judgment; the use of testing; the inherent limitations ofcontrol; and the fact that much of the evidence available is persuasive ratherthan conclusive in nature.

[68] The fact that in an audit absolute assurance is not attainable and the goal isto reduce risk [of an inappropriate conclusion] to the lowest level practicable are

important considerations here, especially in light of the fact that the Auditor General

has access, on a voluntary disclosure basis, to extensive materials otherwise subject

to the solicitor-client privilege of many third party recipients of Special Indemnities.

[69] I turn to Mr. Selmans report. Mr. Selman, while very well qualified andextremely experienced, lacks Mr. Strelioffs very relevant experience as an auditor

general in the public sector. Mr. Selmans extensive private sector auditing

experience explains the fact that much of his opinion concentrates on these audits.

While auditors of public companies undoubtedly have some access to a clients

privileged material, it is not clear whether this is not simply the result of the client

waiving that privilege as part of the retainer. And this type of audit is very different

from one in which a third partys solicitor-client privilege is at stake.

[70] Where the third party solicitor-client privilege is routinely intruded upon inexamples given in Mr. Selmans commentary, it is in the context of Law Society

audits of lawyers practices. This is a discrete sector in this debate and I will return to

it below in my discussion of the cases.


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His agreement in para. 113 avoids addressing the first sentence in para. 70.He gives no opinion regarding the assertion on para. 70 that: these particularcategories of documents and information [in para. 68 of the Petition] arerequired by the Auditor General to conduct the Indemnities Performance

Audit in accordance with CICA Standards.

[77] In the end, I accept Mr. Strelioffs opinion and I prefer it over that ofMr. Selman.

[78] I make one final point on this issue of the necessity for access to third partyprivileged materials in the public sector auditing process.

[79] In the newAuditor General for Local Government Act, S.B.C. 2012, c. 5, anauditor general is appointed (s. 2): to conduct performance audits of the operations

of local government.

[80] By s. 13(3), persons who have been granted money by a local government inrelation to the operations that are subject to the performance audit must give the

auditor general:

... access to records, information, things, facilities and works andexplanations necessary for the Auditor General to conduct a performance

audit.

[81] However, s. 13(4) provides:This section applies despite a claim of confidentiality or privilege other than aclaim based on solicitor-client privilege.[Emphasis added.]

[82] It is interesting to note the legislatures view that a performance audit in thelocal government context does not require unfettered access to materials subject to

solicitor-client privilege.

V. ANALYSIS: SOLICITOR-CLIENT PRIVILEGE

[83] Counsel have been diligent in referring me to all of the leading cases touchingon the fundamentally important principle of solicitor-client privilege. But in the end,


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only a few cases need be specifically noted. I begin, then, with a discussion of three

important cases:

Lavallee, Rackel & Heintz v. Canada (Attorney General); White, Ottenheimer& Baker v. Canada (Attorney General); R. v. Fink, 2002 S.C.C. 61, [2002] 3S.C.R. 209

Descteaux v. Mierzwinski, [1982] 1 S.C.R. 860 Canada (Privacy Commissioner) v. Blood Tribe Department of Health, 2008

S.C.C. 44, [2008] 2 S.C.R. 574

[84] Lavallee, Rackel & Heintzconsidered the constitutionality of s. 488.1 of theCriminal Code of Canada, R.S.C. 1985, c. C-46, which set out a procedure fordetermining a claim for solicitor-client privilege in relation to documents seized from

a law office under a warrant. In finding that the provision breached s. 8 of the

Charter, the majority (per Arbour J.) discussed the essential importance of the

privilege to our legal system, calling it (at para. 36) a principle of fundamental justice

and civil right of supreme importance in Canadian law and continuing:

Indeed, solicitor-client privilege must remain as close to absolute as possibleif it is to retain relevance. Accordingly, this Court is compelled in my view to

adopt stringent norms to ensure its protection. Such protection is ensured bylabeling as unreasonable any legislative provision that interferes withsolicitor-client privilege more than is absolutely necessary.

[85] Descteauxwas decided before Lavallee, Rackel & Heintz. It, too, consideredthe privilege in the context of a search of a lawyers office (there a Legal Aid

Bureau). The Court recognized that the principle has evolved to the point where it no

longer is simply a rule of evidence; it is a substantive rule of law. And that rule is to

be stated as follows (at 875):

1. The confidentiality of communications between solicitor and clientmay be raised in any circumstances where such communications are likely tobe disclosed without the client's consent.

2. Unless the law provides otherwise, when and to the extent that thelegitimate exercise of a right would interfere with another person's right tohave his communications with his lawyer kept confidential, the resultingconflict should be resolved in favour of protecting the confidentiality.


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3. When the law gives someone the authority to do something which, inthe circumstances of the case, might interfere with that confidentiality, thedecision to do so and the choice of means of exercising that authority shouldbe determined with a view to not interfering with it except to the extent

absolutely necessary in order to achieve the ends sought by the enablinglegislation.

4. Acts providing otherwise in situations under paragraph 2 and enablinglegislation referred to in paragraph 3 must be interpreted restrictively.

[86] In the context of our consideration here of the powers of the Auditor General,especially under s. 16 of theAGA, I stress that both paras. 2 and 3 of the

Descteauxtest only contemplate the potential breach of the privilege where the law

in question so provides or gives someone the authority to do so. And in

construing such enabling legislation, the Rules call for a restrictive interpretation.

[87] This brings us to Blood Tribe. It is the controlling jurisprudence on the issuesbefore the Court.

[88] Blood Tribe summarizes, and importantly, strongly buttresses, the previousjudicial declarations of the fundamental importance of the solicitor-client privilege. I

note these paragraphs in Binnie J.s reasons for the Court:

IV Analysis

9 Solicitor-client privilege is fundamental to the proper functioning of ourlegal system. The complex of rules and procedures is such that, realisticallyspeaking, it cannot be navigated without a lawyer's expert advice. It is saidthat anyone who represents himself or herself has a fool for a client, yet alawyer's advice is only as good as the factual information the client provides.Experience shows that people who have a legal problem will often not makea clean breast of the facts to a lawyer without an assurance of confidentiality"as close to absolute as possible":

[S]olicitor-client privilege must be as close to absolute aspossible to ensure public confidence and retain relevance. As

such, it will only yield in certain clearly defined circumstances,and does not involve a balancing of interests on a case-by-case basis.

(R. v. McClure, [2001] 1 S.C.R. 445, 2001 SCC 14, at para.35, quoted with approval in Lavallee, Rackel & Heintz v.Canada (Attorney General), [2002] 3 S.C.R. 209, 2002 SCC61, at para. 36)
http://c/ca/legal/search/runRemoteLink.do%3flangcountry=CA&linkInfo=F%23CA%23SCR%23sel2%251%25year%252001%25page%25445%25sel1%252001%25vol%251%25&risb=21_T16410458593&bct=A&service=citation&A=0.5959548889250432http://c/ca/legal/search/runRemoteLink.do%3flangcountry=CA&linkInfo=F%23CA%23SCC%23onum%2514%25decisiondate%252001%25year%252001%25sel1%252001%25&risb=21_T16410458593&bct=A&service=citation&A=0.32779061320985303http://c/ca/legal/search/runRemoteLink.do%3flangcountry=CA&linkInfo=F%23CA%23SCR%23sel2%253%25year%252002%25page%25209%25sel1%252002%25vol%253%25&risb=21_T16410458593&bct=A&service=citation&A=0.9443142627336599http://c/ca/legal/search/runRemoteLink.do%3flangcountry=CA&linkInfo=F%23CA%23SCC%23onum%2561%25decisiondate%252002%25year%252002%25sel1%252002%25&risb=21_T16410458593&bct=A&service=citation&A=0.671543545293649http://c/ca/legal/search/runRemoteLink.do%3flangcountry=CA&linkInfo=F%23CA%23SCC%23onum%2561%25decisiondate%252002%25year%252002%25sel1%252002%25&risb=21_T16410458593&bct=A&service=citation&A=0.671543545293649http://c/ca/legal/search/runRemoteLink.do%3flangcountry=CA&linkInfo=F%23CA%23SCC%23onum%2561%25decisiondate%252002%25year%252002%25sel1%252002%25&risb=21_T16410458593&bct=A&service=citation&A=0.671543545293649http://c/ca/legal/search/runRemoteLink.do%3flangcountry=CA&linkInfo=F%23CA%23SCC%23onum%2561%25decisiondate%252002%25year%252002%25sel1%252002%25&risb=21_T16410458593&bct=A&service=citation&A=0.671543545293649http://c/ca/legal/search/runRemoteLink.do%3flangcountry=CA&linkInfo=F%23CA%23SCR%23sel2%253%25year%252002%25page%25209%25sel1%252002%25vol%253%25&risb=21_T16410458593&bct=A&service=citation&A=0.9443142627336599http://c/ca/legal/search/runRemoteLink.do%3flangcountry=CA&linkInfo=F%23CA%23SCC%23onum%2514%25decisiondate%252001%25year%252001%25sel1%252001%25&risb=21_T16410458593&bct=A&service=citation&A=0.32779061320985303http://c/ca/legal/search/runRemoteLink.do%3flangcountry=CA&linkInfo=F%23CA%23SCR%23sel2%251%25year%252001%25page%25445%25sel1%252001%25vol%251%25&risb=21_T16410458593&bct=A&service=citation&A=0.5959548889250432


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a Superior Court of record and to receive and accept any evidence and other

information ... whether or not it is or would be admissible in a court of law.

[91] The privacy commissioner maintained that this language extended todocuments over which solicitor-client privilege was claimed. While s. 9 of the

legislation exempted disclosure of documents subject to solicitor-client privilege, the

commissioner argued that s. 12 allowed her to order production for the purpose of

determining the validity of the claim to privilege.

[92] Justice Binnie succinctly dealt with that assertion (at para. 2):It is well established that general words of a statutory grant of authority to an

office holder such as an ombudsperson or a regulator, including words asbroad as those contained in s. 12 ofPIPEDA, do not confer a right to accesssolicitor-client documents, even for the limited purpose of determiningwhether the privilege is properly claimed. That role is reserved for the courts.Express words are necessary to permit a regulator or other statutory officialto "pierce" the privilege. Such clear and explicit language does not appear inPIPEDA. This was the view of the Federal Court of Appeal and I agree with it.I would dismiss the appeal.

[93] It is to be noted that from one perspective, the privacy commissioners claimfor access to documents subject to a claim to solicitor-client privilege, was a limited

one - it was for the purpose of verifying the claim for privilege under s. 9(3)(a) of the

legislation at bar there. Even access for that limited purpose was subject to the

Courts criticism (see para. 17). Such a verifying jurisdiction is a far cry from the

exceedingly broad, indeed untrammeled, access to privileged material which the

Auditor General seeks here.

[94] In Blood Tribe, the privacy commissioner referred to her court-like powers andthe fact that courts traditionally review documents to verify a claim of solicitor-clientprivilege. Justice Binnie responded (at para. 21):

21 I do not accept the validity of the analogy between the PrivacyCommissioner and a court in this respect. The Privacy Commissioner is astranger to the privilege. She argues that because of her independence fromthe parties her adjudication of a claim of privilege would not be aninfringement of the privilege. I do not agree. Client confidence is the


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underlying basis for the privilege, and infringement must be assessed throughthe eyes of the client. To a client, compelled disclosure to an administrativeofficer, even if not disclosed further, would constitute an infringement of theconfidentiality. The objection is all the more serious where (as here) there is a

possibility of the privileged information being made public or used against theperson entitled to the privilege: Lavallee, at para. 44; Goodis, at para. 21;Pocklington Foods Inc. v. Alberta (Provincial Treasurer), [1993] 5 W.W.R. 710(Alta. C.A.). While s. 12 gives the Privacy Commissioner some court-likeprocedural powers, she is not a court of law. The words of s. 12(1)(a) confera power to compel production of

any records and things that the Commissioner considersnecessary to investigate the complaint, in the same mannerand to the same extent as a superior court of record... .

This amounts to a general production provision. In Pritchard, the Courtdismissed a similar argument concerning s. 10 of the Ontario Judicial Review

Procedure Act. We held that a general production provision that does notspecifically indicate that the production must include records for whichsolicitor-client privilege is claimed is insufficient to compel the production ofsuch records (Pritchard, at para. 35). On the other branch of her argument,the Privacy Commissioner points out that s. 12(1)(c) permits her in the courseof exercising her powers of investigation to

(c) receive and accept any evidence and otherinformation, whether on oath, by affidavit or otherwise,that the Commissioner sees fit, whether or not it is orwould be admissible in a court of law;

The authority to receive a broad range of evidence cannot be read toempower the Privacy Commissioner to compel production of solicitor-clientrecords from an unwilling respondent. The language of s. 12 is simplyincapable of carrying the Privacy Commissioner to her desired conclusion.

[Emphasis in the original.]

[95] Justice Binnie stressed the general language of the production power in s. 12and the prohibition against abrogation of the privilege by inference (at para. 26).

[96] The privacy commissioner noted the breadth of the production powers sheenjoyed under the Privacy Act, R.S.C. 1985, c. P-21, and argued that Parliament

could not have intended that the commissioners virtually identical powers of

investigation be contradictory as between these constituent pieces of legislation.

[97] Justice Binnie concluded that the two statutory powers were indeed not thesame and the explicitness of the Privacy Actpower was to be noted and contrasted
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[107] Of course I highlight the breadth of disclosure required by s. 52(3):notwithstanding another act or regulationor a privilege under the law of evidence.

[108] The Court referred to Blood Tribe and noted that the restrictive approachmandated there requires that solicitor-client privilege cannot be abrogated by

inference and that open-textured language governing production of documents must

be read so as not to include records subject to a claim of solicitor-client privilege.

But, of course, clear, unambiguous legislative language can, subject to the

Descteauxrules and Charterconsiderations, permit abrogation of the privilege. The

Court found such clear and unambiguous language in s. 52 of the legislation and, in

particular, s. 52(3) thereof.

[109] At para. 45, the Court concluded:45 The relevant portions of section 52 of ATIPPA read, "Thecommissioner may require any record ... to be produced ... notwithstanding ...a privilege under the law of evidence". The words "notwithstanding ... anyprivilege under the law of evidence" are sufficiently clear to abrogate solicitor-client privilege, as this is a privilege recognized under the law of evidence.The "law of evidence" is defined in Black's Law Dictionary as "The body oflaw regulating the admissibility of what is offered as proof into the record of alegal proceeding". Solicitor-client privilege is unquestionably a rule regulating

the admissibility of what is offered as proof into the record of a legalproceeding.

[110] The Court then went on to conclude that looking beyond the words in s. 52, tothe context and purpose of s. 52 under the proper approach to statutory

interpretation, did not lead to a different result. I note that a similar result obtained in

our Court with Butler J.s decision in Central Coast School District No. 49 v. British

Columbia (Information and Privacy Commissioner), 2012 BCSC 427, interpreting the

provisions of ourFreedom of Information and Protection of Privacy Act, R.S.B.C.1996, c. 165.

[111] All that Newfoundlanddemonstrates is that the privilege may be abrogatedwhere the legislature uses clear and unambiguous language, and that simply begs

the question of whether it has here, in s. 16. Blood Tribes admonition against so


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14(1) Notwithstanding the Freedom of Information and Protection of PrivacyActor any other legislation, and notwithstanding any other rights of privacy,confidentiality or privilege, including solicitor-client privilege, litigationprivilege, settlement privilege and public interest immunity, the auditor

General has the right of unrestricted access, at all times, to all records of anyauditable entity, including the right to copy such records and to any things orproperty belonging to or used by any auditable entity, and every officer,employee and agent of any auditable entity shall forthwith provide the AuditorGeneral any such information or explanations, or information concerning itsduties, activities, organization and methods of operation, that the AuditorGeneral believes to be necessary to perform the Auditor Generals dutiesunder this Act.

[118] The contrast between this provision and the open-textured language of s. 16of theAGA is stark. This, in particular, extends to the breadth of the

notwithstanding clause in the Nova Scotia legislation. Some reliance was placed

on the notwithstanding clause in s. 16 of theAGA by the Auditor General before

me.Section 16 begins so: Despite any other enactment.

[119] It is rather the narrowness of this notwithstanding clause that is remarkable.Unlike the Nova Scotia legislation, and other provisions we have seen above, this

clause does not expressly extend to solicitor-client privilege or any law of

evidence.

[120] Enactment in s. 16 is defined in the Interpretation Act, R.S.B.C. 1996,c. 238, s. 1, as meaning:

"enactment" means an Act or a regulation or a portion of an Act orregulation;

[121] Regulation is, in turn, defined in the same section:"regulation" means a regulation, order, rule, form, tariff of costs or fees,

proclamation, letters patent, commission, warrant, bylaw or other instrumentenacted

(a) in execution of a power conferred under an Act, or

(b) by or under the authority of the Lieutenant Governor inCouncil,


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but does not include an order of a court made in the course of an action or anorder made by a public officer or administrative tribunal in a dispute between2 or more persons;

[122] It tells very much against the Auditor Generals submission on s. 16, that itsnotwithstanding clause does not expressly include solicitor-client privilege or at

least any law of evidence. If one were to draw an inference, the specificity of

[d]espite any other enactment would encourage one to say that the more general

notwithstanding clause - one including rules of common law - is thereby denied.

Specificity engrafted on a generality (like the power in s. 16) is the hobgoblin of the

petitioners argument on this point.

[123] This is a convenient point to deal with the Auditor Generals argument basedon the so-called presumptions that the legislature uses consistent expressions from

statute to statute and avoids stylistic variation: Ruth Sullivan, Sullivan on the

Construction of Statutes, 5th ed. (Markham, Ont.: LexisNexis, 2008) at 215-216.

[124] The argument of the Auditor General then proceeds: in various pieces oflegislation, the legislature has expressly limited access powers by excepting

documents subject to a claim for solicitor-client privilege. The implication is that

where no such exception is to be found in s. 16 of theAGA, the noted presumptions

would lead one to conclude that an exception for privileged documents was not

intended by the legislature.

[125] For example, in the Auditor General for Local Government Act, already noted,s. 13(4) provides:

This section applies despite a claim of confidentiality or privilege other than aclaim based on solicitor-client privilege.

[126] Similarly, in the Representative for Children and Youth Act, S.B.C. 2006,c. 29, there is a broad duty on public bodies to produce information to the

representative under ss. 10(2) and (3). But s. 10(4) provides:

(4) This section applies despite


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(a) any claim of confidentiality or privilege other than aclaim based on solicitor-client privilege, and

(b) any other enactment, other than a restriction in section51 of the Evidence Act.

[127] But the obverse of this submission is much more compelling. It is theargument that an exception for claims based on solicitor-client privilege was only

necessary in these provisions because the legislature had first provided that

disclosure was required despite any claim of confidentiality or privilege and

therefore had to so limit the notwithstanding clause (as it apparently intended). As I

have already noted, s. 16 of theAGA does not contain a notwithstanding clause of

such breadth.

[128] My point is made even stronger when we look at the unqualifiednotwithstanding clause in the Freedom of Information and Protection of Privacy

Act, where production powers are given the commissioner in s. 44. Section 44(3)

provides:

(3) Despite any other enactment or any privilege of the law of evidence, apublic body must produce to the commissioner within 10 days any record or acopy of any record required under subsection (1).

[129] So, in an application of the so-called presumptions, we see that where thelegislature wishes to include in a production power documents subject to solicitor-

client privilege, it does so expressly by using words to the effect that production

follows despite ... any privilege of the law of evidence or phrases to like effect. It

has not done so in s. 16.

[130] At best, all this means is that s. 16 of theAGA is susceptible to a number ofinterpretations, but in applying Descteaux, one must adopt the restrictive approach

and shun finding an abrogation of the privilege by inference.

[131] Before I turn to one of the principal authorities advanced by the AuditorGeneral, I will deal quickly with the Law Society line of cases, where the powers of

various provincial law societies to access solicitor-client materials in the course of


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the investigation of professional complaints or audits have been upheld. These

cases include:

Greene v. Law Society of British Columbia, 2005 BCSC 390 Hammerberg & Co. v. Margitay, 2001 BCSC 1312 Law Society of Saskatchewan v. Merchant, 2008 SKCA 128 Skogstad v. The Law Society of British Columbia, 2007 BCCA 310

[132] The most helpful of these decisions is that of the Saskatchewan Court ofAppeal in Merchant. There, access to documents requested in the course of the

investigation of a complaint to the Law Society of Saskatchewan was refused on a

claim of solicitor-client privilege.

[133] Access was ordered. The production power in s. 63(1) of the legislationprovided:

63(1) Every member and every person who keeps any of a membersrecords or other property shall comply with a demand of a person designatedby the benchers to produce any of the members records or other propertythat the person designated by the benchers reasonably believes are requiredfor the purposes of an investigation pursuant to this Act.

[134] The Court of Appeal referred to the four-part test in Descteauxand atpara. 45 suggested the proper approach to its application:

45 What then is the proper line of analysis in relation to this aspect of theappeal? It seems to me that it is ultimately quite straightforward. First, it mustbe determined whether the Law Society has the authority to demand theproduction of records subject to solicitor-client privilege. Second, if theSociety has such powers, consideration must be given to whether thatauthority has been exercised so as not to interfere with privilege except to theextent absolutely necessary. I will examine each of these points in turn.

[135] Before one considers the minimal impairment of the privilege - viz., has theauthority been exercised so as not to interfere with the privilege except to the extent

absolutely necessary - one must first determine whether the authority to abrogate

the privilege has indeed been granted by the legislative provision in question. In

Merchant, the Court concluded that it had been (at para. 48):


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effect of his inability to obtain required information or evidence on his or herfindings and conclusions.

[139] What this means is that the Auditor Generals submission that he inevitablyrequires complete and unfettered access to solicitor-client privileged materials

simply to do his job, cannot be accepted. Nor can the conclusion then urged (in

effect):

Because I absolutely require these materials, the statute must be construedas authorizing such access or one is rendering nugatory the statute of theLegislature.

[140] This brings us to a case upon which the Auditor General has placedconsiderable reliance in submissions before the court: Philip Services Corp.

(Receiver of) v. Ontario (Securities Commission) (2005), 77 O.R. (3d) 209 (S.C.J.).

[141] Philip Services was a case which again considered whether the delivery ofdocuments subject to solicitor-client privilege to a companys auditors amounted to a

general waiver of the privilege for the purpose of access to those materials by the

Ontario Securities Commission.

[142] Although the documents were provided voluntarily, there were disclosurerequirements for the company set out in Ontarios Business Corporations Act,

R.S.O. 1990, c. B.16 [OBCA]. Sections 153(5) to (7) of thatActprovide:

Right of access

(5) Upon the demand of an auditor of a corporation, the present or formerdirectors, officers, employees or agents of the corporation shall furnish such,

(a) information and explanations; and

(b) access to records, documents, books, accounts and

vouchers of the corporation or any of its subsidiaries,as are, in the opinion of the auditor, necessary to enable the auditor to makethe examination and report required under this section and that the directors,officers, employees or agents are reasonably able to furnish.

Furnishing information

(6) Upon the demand of the auditor of a corporation, the directors of thecorporation shall,
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(a) obtain from the present or former directors, officers,employees and agents of any subsidiary of thecorporation the information and explanations that thepresent or former directors, officers, employees and

agents are reasonably able to furnish and that are, inthe opinion of the auditor, necessary to enable theauditor to make the examination and report requiredunder this section; and

(b) furnish the information and explanations so obtained tothe auditor.

Idem

(7) Any oral or written communication under this section between theauditor or former auditor of a corporation and its present or former directors,officers, employees or agents or those of any subsidiary of the corporation,has qualified privilege.

[143] The company argued that the statute created a compulsion to disclose theprivileged documents that belied a voluntary disclosure and hence, could not form

the basis for an implied waiver of the privilege. This was an issue considered under

the Canada Business Corporations Act, R.S.C. 1985, c. C-44, which contains

provisions similar to those noted in the OBCA, in Interprovincial Pipe Line v. M.N.R.,

[1996] 1 F.C. 367.

[144] In both Philip Services and Interprovincial Pipe Line, the courts proceeded onthe basis that the statutes must be read as requiring disclosure of privileged

materials to the auditors. For example, in Philip Services, the Ontario Divisional

Court (per Lane J.) stated (at para. 52):

[52] Accepting the above as the guiding principle, I turn to the case athand. Auditors, in pursuit of their important public function of ensuring thefairness of the presentation of the accounts of public companies, have theright to obtain whatever documentation they require, which may, as here,involve the production to them of documents as to which the client claims

solicitor-client privilege. Auditors are not in the family of the client; they arethird parties. Ordinarily the voluntary production of privileged documents tothird parties is a waiver of the claim for solicitor-client privilege. Clearly, theauditor must be free to use the documents for the purposes of the auditwithout limitation. The auditor may ask the client to publish them or asummary of them in a note to the financial statements if that is required for afair presentation, failing which the auditor, in a serious case, will likely feelobliged to resign, a serious and public event for a company regulated by a


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securities commission. But the mere possession of the documents does notgive the auditor the right to publish them in the financial statement, nevermind otherwise. The financial statements are the clients; the auditor's right isto withhold the certificate. To what extent do these functions require that the

waiver of solicitor-client privilege by the client be for all purposes at all futuretimes?

[145] I note, parenthetically, that it is important that the Court in Philip Services (andothers) have emphatically stated that auditors are not in the family of the client; they

are third parties. This answers the submission of the Auditor General here that he is

within the umbrella of the privilege.

[146] But of more importance, I suggest that the courts in these cases undertook noreal analysis in suggesting that the statutes compelled production of the privileged

documents. It was more or less assumed, and it was assumed in the context of the

relationship between the companies and their respective auditors, not as in the case

at bar, as between the auditor and government and third parties.

[147] Finally, both cases were decided before the Supreme Court of Canadasdecision in Blood Tribe. In my respectful view, they offer little assistance to the Court

in respect of the issues at bar.

[148] I can here deal summarily with Mr. van Dongens absurdity argument basedon s. 70 of the Legal Professions Act. In my respectful view, the fact that s. 70 may

permit the government to demand a review of the legal accounts of those whom it

indemnifies adds little to the debate. A legal accounts review is much more limited

than the sweeping invasion of solicitor-client privilege which the Auditor General

seeks by way of relief here. In my view, statutory provisions in theAGA are to be

construed in the context of the law articulated in Blood Tribe. I would not give effect

to this submission.

[149] Finally, I should observe that the Auditor General was at pains to stress thathis dissemination of privileged materials was closely guarded by s. 9 of theAGA and

his self-imposed Guidelines. I take this to be a submission on the minimum


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impairment requirement of para. 3 of the Descteauxtest. That, as I have

developed, would only have been at issue in the event that I had found that indeed

the legislature has given the Auditor General power to interfere with the privilege. I

have not. That said, given the breadth of potential disclosure under s. 9 of the AGA,

and the shifting of the burden to prevent disclosure to the privilege holder under the

Guidelines, I have serious reservations that this scheme adequately addresses the

minimum impairment rule.

[150] In summary, I have concluded that properly construed, s. 16 of theAGA doesnot support the declarations sought by the Auditor General with respect to material

and evidence subject to a claim of solicitor-client privilege.

[151] As the parties have, I have largely analyzed the reach of s. 16 of theAGA inthe context of the Special Indemnities which, of course, causes the inquiry to focus

on the solicitor-client privilege of third parties who are otherwise unrelated to

government. The declarations sought would also include material subject to the

governments own solicitor-client privilege. I do not believe that a different result

would follow in this context. I have construed s. 16 in light of the cases and, in

particular, as guided by Blood Tribe. The rule against abrogation of the privilege byinference would seem to me to apply equally here. This is likely not a practical issue

as it appears that government and the Auditor General have arrived at necessary

accommodations in this regard. In the words of Mr. Copley, in this area: co-

operation should be the rule and litigation the exception.

VI. PUBLIC INTEREST IMMUNITY

[152] Notwithstanding the mootness of this issue, in light of the governmentsvoluntary disclosure of Cabinet documents which otherwise attract this privilege, the

parties asked me to consider s. 16 in light of this privilege.

[153] As I noted above, theAmicus did not make submissions on this aspect of thematter and the submissions of the Auditor General barely touched on it. In all of the


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