Court rules in favour of Laurentian, university doesn't have to surrender confidential documents

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Ontario's Superior Court of Justice has stayed enforcement of a Speaker's warrant demanding Laurentian University hand over privileged information to a provincial committee.

In a decision dated Jan. 26, Chief Justice Geoffrey B. Morawetz said whether a Canadian legislature can order someone to surrender documents already sealed by a court order is "an open question."

"The question as to whether the legislative assembly can compel the production of such information or whether this goes beyond the scope of Parliamentary privilege is a serious issue that has not been addressed in any reported decision," Morawetz wrote.

"It is a fundamental question that affects the relationship between the three independent branches of government – the executive, the legislative and the judicial."

In this case, the province's Standing Committee on Public Accounts approved a motion demanding Laurentian University hand over all documents requested by Auditor General Bonnie Lysyk. The motion was approved by the Ontario legislature just before Christmas.

The documents include information under a sealed order as part of the Companies' Creditors Arrangement Act (CCAA), under which Laurentian University's declared insolvency on Feb. 1, 2021.

The cases centres on a dispute between Laurentian University and Auditor General Bonnie Lysyk, who is conducting a value-for-money audit to find out why it declared insolvency.

Laurentian resisted efforts by Lsysk to access confidential documents. An earlier court ruling said she doesn't have the power to demand the documents under existing provincial legislation.

The committee issued the warrant demanding the documents in early December using Parliamentary privilege that gives the legislature the right to demand access to any document or witness it chooses. The committee would then give the documents to Lysyk for her audit.

At issue was the separation of powers of the courts and elected politicians. Does the right of elected assemblies to demand any information they deem necessary under Parliamentary privilege take priority over the court's ability to order documents sealed?

Morawetz wrote his job was to strike a balance between the two competing priorities. While accepting most arguments put forward by the lawyer for the Speaker, the judge said he disagreed that rejecting the warrant would upset the balance of power between legislative and judicial branches of government.

"It is on this point that I find that I am unable to accept the position of the Speaker and the Attorney General," he wrote.

"I have not been provided with any authority that stands for the proposition that a pre-existing court order which restricts the disclosure of specified information can be overridden by a legislative assembly’s demand for production."

In this case, unsealing the documents would do significant harm to the parties involved in the CCAA process, Morawetz ruled.

"I have no hesitation in concluding that the disclosure of the information referenced in the sealing order and the mediation order is likely to result in irreparable harm to LU," he wrote in his decision.

"The consequences of disclosing the information that is restricted by the sealing order and the mediation orders are significant. The CCAA proceedings have been ongoing for a year and LU is in the process of developing its restructuring plan. Disclosure of the positions of affected parties at this stage, including that of LU, would be problematic."

The balance of convenience test – deciding which side would suffer more harm – also favours Laurentian, Morawetz said.

But he said a hearing could be scheduled in February or March to hear arguments on that point.

"There will only be a relatively short delay in enforcement of the Speaker’s warrant pending determination of the scope of the privilege," he wrote.

"It is a serious issue which should be determined before it becomes a moot point."

Read the full decision here.