Lyons v. Toronto (Computer Leasing Inquiry -- Bellamy Commission)

[Indexed as: Lyons v. Toronto (Computer Leasing Inquiry -- Bellamy Commission)]

70 O.R. (3d) 39 [2004] O.J. No. 648 Court File Nos. 654/03 and 771/03, Consolidated as 771/03

Ontario Superior Court of Justice Divisional Court O'Driscoll, Then and Swinton JJ. February 19, 2004

Administrative law -- Inquiries -- Superior Court judge sitting as Commissioner in inquiry under Municipal Act having power to inspect potentially privileged documents to determine whether documents are in fact privileged -- Commissioner properly ordering that potentially privileged documents were to be reviewed by Commission counsel and that unresolved issues of relevance were to be determined by Commissioner while unresolved privilege claims were to be placed before Regional Senior Justice for ruling -- Commission counsel acting on behalf of Commissioner and not being in adversarial position with respect to party claiming privilege -- Procedure adopted by Commissioner minimally impairing solicitor-client privilege and not violating ss. 7 or 8 of Charter -- Canadian Charter of Rights and Freedoms, ss. 7, 8 -- Municipal Act, 2001, S.O. 2001, c. 25, s. 274.

Toronto City Council, pursuant to s. 274 of the Municipal Act, 2001, S.O. 2001, c. 25, established the Toronto Computer Leasing Inquiry to investigate transactions related to certain computer and software contracts entered into by the City. The applicant was a lawyer but in recent years had worked primarily as a lobbyist, conducting his business from the law firm MBS. In that capacity, he provided assistance to clients in their dealings with the City. The activities of three of those clients, MFP, DFS and Dell, were part of the subject matter of the inquiry. The applicant testified before the Commission that he did no legal work for those three clients and that if legal work was needed, it was done by other members of MBS. The applicant was served with a Summons to Witness asking him to locate and provide the Commission with all documents within his custody, control and power touching on the matters in question. He produced some documents relating to MFP but no documents relating to DFS.

The Commission issued a summons directly to MBS, requiring that firm to produce any material it had relating to the issues before the inquiry. MBS initially advised Commission counsel that it did not have physical files pertaining to any of the parties referred to by Commission counsel, but continued its search efforts and eventually discovered a large amount of potentially relevant material, including a file pertaining to the applicant's work for DFS. In testimony before the Commission before the DFS file was located by MBS, the applicant stated that the file had been destroyed. The Commissioner was troubled by the contrast between the applicant's testimony and the subsequent search results.

MBS delivered to Commission counsel 18 boxes of files on a sealed basis, on the understanding that Commission counsel would not unseal them without either the consent of the applicant or an appropriate ruling from the Commissioner. The applicant asserted a blanket privilege over all the sealed material and questioned its relevance. Commission counsel brought a motion before the Commissioner to unseal and inspect the boxes of documents. The Commissioner ordered that the boxes were to be unsealed by Commission counsel and reviewed for relevance, helpfulness and possible solicitor-client privilege. The applicant and/or his counsel would be entitled to attend and participate. Unresolved helpfulness issues were to be resolved by the Commissioner, while unresolved privilege issues were to be arbitrated by the Regional Senior Justice at Toronto.

The applicant brought an application for judicial review of that decision, arguing that the procedure adopted by the Commissioner was an unreasonable search and seizure under s. 8 of the Canadian Charter of Rights and Freedoms and a violation of the principles of fundamental justice under s. 7 of the Charter. Counsel for the applicant submitted that minimal impairment of the Charter would ensue if he viewed the documents first to determine if privilege existed. That argument rested on the assumption that Commission counsel was an agent of the state in an adversarial position vis-…-vis the applicant, so that allowing Commission counsel a role in screening the documents would not minimally impair solicitor-client privilege. The applicant then brought a motion to vary the ruling, raising grounds that had not been before the Commissioner on the motion by Commission counsel and alleging that Commission counsel had taken an improperly adversarial approach in dealings with his counsel. The Commissioner declined jurisdiction over the motion to vary. The applicant brought an application for judicial review of that decision.

Held, the applications should be dismissed.

It was questionable whether solicitor-client privilege existed in this case, given that on the applicant's own uncontradicted evidence before the Commission, he did not act as a lawyer and did not practise law during the relevant period while associated with MBS and did not provide legal services to MFP, DFS or Dell, acting for them solely as a lobbyist. However, there was a possibility that there might be privileged documents in the boxes. The screening process put in place by the Commissioner minimally impaired solicitor-client privilege. The task of screening the documents could not be left to the applicant, given his past conduct. To give the task to his solicitor was to introduce a stranger into the review process, as counsel for the applicant had no solicitor and client relationship with the individuals whose privileged documents might be in the boxes. Moreover, although he was an officer of the court, his duty was to the applicant, which could put him in a conflict of interest position in reviewing the documents. The Commissioner, a judge of the Superior Court of Justice, had the power to determine whether documents were privileged and, therefore, inadmissible in Commission hearings. If a judge may inspect potentially privileged documents in the civil litigation context, a judge sitting as a Commissioner in the context of an inquiry under the Municipal Act was also able to do so. The applicant was wrong in his characterization of Commission counsel as an agent of the state who was in an adversarial position, analogous to a Crown prosecutor. The privilege which the applicant sought to protect was that of his clients or former clients, and there was no reason to think that there was any conflict between Commission counsel and the individuals who might claim privilege with respect to the documents in the sealed boxes.

The Commissioner properly declined jurisdiction to entertain a motion to vary, as the order in question was already the subject of a pending application for judicial review. Moreover, the variation motion appeared to be an attempt to put material before the Commissioner which the applicant's counsel could have presented at the first hearing.

Cases referred to

Lavallee, Rackel and Heintz v. Canada (Attorney General), 2002 SCC 61, [2002] 3 S.C.R. 209, 216 D.L.R. (4th) 257, 4 Alta. L.R. (4th) 1, 2002 SCC 61, 651 A.P.R. 183, 167 C.C.C. (3d) 1, consd

Other cases referred to

Ansell Canada Inc. v. Ions World Corp., [1998] O.J. No. 5034 (QL), 28 C.P.C. (4th) 60 (Gen. Div.); Canadian Civil Liberties Assn. v. Ontario (Civilian Commission on Police Services) (2002), 2002 45090 (ON CA), 97 C.R.R. (2d) 271, 220 D.L.R. (4th) 86, 61 O.R. (3d) 649, 2002 45090 (ON CA), [2002] O.J. No. 3737 (QL) (C.A.); Church of Scientology and The Queen (No. 6) (Re) (1987), 31 C.C.C. (3d) 449, 1987 122 (ON CA), 30 C.R.R. 238, 18 O.A.C. 321 (C.A.), affg (1985), 21 C.C.C. (3d) 147, 1985 3595 (ON SC), 15 C.R.R. 23 (Ont. H.C.J.); Consortium Developments (Clearwater) Ltd. v. Sarnia (City) (1998), 165 D.L.R. (4th) 25, 48 M.P.L.R. (2d) 1, 230 N.R. 343, 40 O.R. (3d) 158n, 1998 762 (SCC), [1998] 3 S.C.R. 3; Maranda v. Richer (2003), 178 C.C.C. (3d) 321, 2003 SCC 67, 232 D.L.R. (4th) 14, 311 N.R. 357, [2003] 3 S.C.R. 193, 2003 SCC 67, 15 C.R. (6th) 1, [2003] S.C.J. No. 69

Statutes referred to

Canadian Charter of Rights and Freedoms, ss. 7, 8 Criminal Code, R.S.C. 1985, c. C-46, s. 488.1 Judicial Review Procedure Act, R.S.O. 1990, c. J.1 Municipal Act, 2001, S.O. 2001, c. 25, s. 274 Public Inquiries Act, R.S.O. 1990, c. P.41, s. 11

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 30.10(3)

Authorities referred to

O'Connor, D."The Role of Commission Counsel in a Public Inquiry" (2003) 22 Advocates' Soc. J. 10

Counsel:

David Stratas and Brad Elberg, for applicant. Earl Cherniak, Q.C., Kirk Stevens and Christine Snow, for respondent. Linda Rothstein and Andrew Lewis, for intervenor City of Toronto.

[1] SWINTON J: -- The applicant has brought two applications, now consolidated, for judicial review under the Judicial Review Procedure Act, R.S.O. 1990, c. J.1. The first application (654/03, launched on October 24, 2003) seeks an order in the nature of certiorari quashing a ruling of the Commissioner dated October 15, 2003, and for an order remitting the matter back to the Commissioner for re-determination on the basis that the contents of the applicant's 18 sealed boxes of documents be handed over to the applicant's solicitors for them, and them only, to examine the contents for relevance and solicitor-client privilege. The second application (771/03, launched December 18, 2003) seeks an order in the nature of certiorari quashing the decision of the Commissioner made on an unknown date and announced by a letter, dated November 17, 2003, sent to the solicitor for the applicant. This judicial review application concerns the applicant's motion to vary the order of the Commissioner, dated October 15, 2003. The applicant also seeks an order by way of mandamus requiring the Commissioner to determine the motion for variation.

Background and Chronology

[2] In February 2002, Toronto City Council, pursuant to s. 274 of the Municipal Act, 2001, S.O. 2001, c. 25, established the Toronto Computer Leasing Inquiry ("TCLI") and appointed the Honourable Denise Bellamy as Commissioner. The purpose of the inquiry is to investigate all aspects of the transactions related to certain computer leasing and software contracts entered into by the City of Toronto between 1998 and 2001 and to consider their impact on the City's ratepayers as they relate to the good government of the municipality or the conduct of the City's public business. This inquiry was officially commenced in September 2002 and is ongoing.

[3] In October 2002, Toronto City Council, again pursuant to s. 274 of the Municipal Act, supra, established the Toronto External Contracts Inquiry ("TECI"). It is scheduled to begin shortly, according to the respondent's factum. TECI's mandate is to investigate a number of issues relating to consultants retained by the City of Toronto and the former City of North York and the purchase of certain computer hardware that forms the basis for the computer leasing transactions which are also the subject of TCLI, the first inquiry.

[4] The applicant, Jeffrey Lyons, is a lawyer, but in recent years he has worked primarily as a lobbyist. In this capacity, he provided assistance to clients in their dealings with the City of Toronto. Those to whom he provided assistance included MFP Financial Services Ltd. ("MFP"), Dell Financial Services Limited ("DFS") and Dell Computer Corporation ("Dell"). The activities of those three corporations between 1998 and 2001 are part of the subject matter of both inquiries.

[5] Between December 1995 and June 2001, Mr. Lyons conducted his business as a lobbyist from the law firm of Morrison Brown Sosnovitch LLP ("MBS"). He has testified that he worked as a lobbyist while at MBS, and when legal work was required by his clients, the work was handled by other members of the law firm. For example, the following exchange between Commission counsel and Mr. Lyons is found in the Inquiry's transcripts dated May 8, 2003 (p. 14):

Q. All right. Now, at the time that -- at the time you became associated with Morrison Brown Sosnovitch as a counsel, were you practicing law anymore? A. Not really. Q. All right. A. I was doing some administrative law but . . . Q. In relation to -- to Dell Financial Services, Dell Computer were you engaged in giving them legal advice or practicing law when they retained you? A. No.

At another point, when asked whether he was familiar with the practice of law firms sending files to off-site storage, Mr. Lyons gave the following answer:

A. We don't have any legal files. Q. I'm saying, Mr. Lyons, that you surely developed a practice as a lawyer, over all the years that you practiced of sending closed files to off-site storage? A. Yes, when I was a lawyer, but I don't practice law.

[6] In August 2002, the applicant was interviewed by Commission counsel and served with a TCLI "Summons to Witness". The summons advised Mr. Lyons that he had an obligation to make every reasonable effort to locate and provide the Commission with all documents within his custody, control and power "touching on the matters in question".

[7] On December 2, 2002, Mr. Lyons applied for and was granted standing at the inquiry. Under TCLI's Rules of Procedure, those granted standing are deemed to undertake to follow the Rules of Procedure. Under Rules 9 and 11 of those rules, Mr. Lyons was thereby required to produce to the Commission all documents having any bearing on the subject matter of the inquiry.

[8] Mr. Lyons produced some documents to Commission counsel relating to MFP, but no documents relating to DFS were produced. On February 14, 2003, Commission counsel wrote to Mr. Lyons' counsel and reminded Mr. Lyons of his obligation to contact the law firm MBS in order to ensure that he, Mr. Lyons, had produced all material relevant to the inquiry.

[9] By the beginning of March 2003, Commission counsel had received no response or assurance that MBS had been contacted in order to search for material helpful to the inquiry. Therefore, on March 7, 2003, Commission counsel issued a TCLI/TECI summons directly to MBS, requiring that law firm to produce any material it had relating to the issues before the inquiry. Mr. Lyons' counsel has conceded that this summons was properly issued.

[10] Initially, MBS advised Commission counsel that it did not have physical files pertaining to any of the parties referred to by Commission counsel. The firm, however, continued its search efforts and eventually discovered a large amount of potentially relevant material in both electronic and paper format, including a file pertaining to Mr. Lyons' work for DFS. Most of the additional material was located in banker's boxes which were found in the off-site storage facilities of MBS.

[11] On May 8, 12, 13 and 14, 2003, Mr. Lyons testified before Commissioner Bellamy at the TCLI. Unfortunately, Commission counsel did not become aware of the existence of the additional material found by MBS until after Mr. Lyons completed his testimony on May 14. During his testimony, Mr. Lyons stated that the DFS file had been destroyed, although it was found by MBS.

[12] For the purposes of these reasons, there is no need to comment upon the applicant's testimony before the inquiry. The Commissioner's assessment of Mr. Lyon's evidence may be found at pp. 1 to 4 of her Ruling, dated October 15, 2003. Her assessment was summarized in this sentence on p. 3: "With the benefit of hindsight, the contrast between Mr. Lyons' testimony and the later results of the search for material by Morrison Brown Sosnovitch is striking and troubling."

[13] In July 2003, MBS advised Commission counsel in a letter that "we did send two boxes of Mr. Lyons' personal files to Mr. Lyons at his request some time in the calendar year 2002." The Commissioner observed in her reasons at p. 4:

Mr. Lyons was therefore aware he had boxes in storage at Morrison Brown Sosnovitch. The Toronto Computer Leasing Inquiry was publicly announced in February 2002. Commission Counsel do not know what was in the boxes, nor do they know when in 2002 they were retrieved. Mr. Lyons has not volunteered this information.

[14] On July 22, 2003, MBS delivered to Commission counsel 18 boxes of files which had been retrieved from its storage facilities. In accordance with a suggestion from Commission counsel, MBS delivered the boxes on a sealed basis, on the understanding that Commission counsel would not unseal them without either the consent of Mr. Lyons or an appropriate ruling from the Commissioner.

[15] On August 6, 2003, Commission counsel advised counsel for the applicant that it had received the material and proposed to deal with the unsealing in the manner which had been accepted by other parties at the inquiry. It was proposed that Commission counsel would unseal the boxes and review their entire contents on a without prejudice basis. If desired, the applicant and/or his counsel could be present throughout and review the contents at the same time. Privilege and relevance issues would be resolved through discussion, if possible. If not, relevance issues would be determined by the Commissioner, and privilege issues would be determined by Regional Senior Justice Blair of Toronto.

[16] Counsel for the applicant then asserted a blanket privilege over all the sealed material and also questioned its relevance. A lengthy exchange ensued between Commission counsel and counsel for the applicant. In view of Commission counsel's undertaking to MBS and in the absence of any agreement from Mr. Lyons or his counsel to unseal the boxes, Commission counsel had no choice but to bring before the Commissioner a motion to unseal and inspect the 18 boxes containing documents belonging to the applicant.

The October 10, 2003 Motion

[17] At the motion, argued on October 10, 2003, counsel for Mr. Lyons and counsel for Dell took the position that counsel for the party claiming privilege should review his or her client's material and do so in the absence of Commission counsel. Counsel for the Commissioner submitted that the Commission's practice to that date should be continued -- that is, the same procedure that had been adopted on a consensual basis at the Walkerton Inquiry to deal with issues of Cabinet privilege. Counsel for the City of Toronto concurred in Commission counsel's submissions.

[18] Under the Walkerton protocol, the 18 boxes at the Inquiry premises would be unsealed by Commission counsel and reviewed for relevance, helpfulness and possible solicitor-client privilege. Mr. Lyons and/or his counsel would be entitled to attend and participate. Unresolved helpfulness or relevancy issues were to be resolved by the Commissioner, while unresolved privilege claims were to be arbitrated by the Regional Senior Justice at Toronto.

[19] Both counsel for the applicant and counsel for the Commission filed separate records with respect to the motion. The materials filed by both counsel included only correspondence from the same time period -- that is, from the issuance of the summons to MBS in March 2003 up [to] the hearing of the motion.

[20] After reviewing the material filed and hearing submissions on October 10, 2003, the Commissioner reserved her decision. On October 15, 2003, she released a 15-page ruling. At p. 14 of her "Conclusion and Ruling", the Commissioner accepted the submissions of Commission counsel and counsel for the City and set out her formal order, which adopts the procedure proposed by Commission counsel. The terms of the formal order are as follows:

1. Commission Counsel will unseal all eighteen boxes received at the Inquiry premises from Morrison Brown Sosnovitch and review their entire contents for relevance, helpfulness and possible privilege, taking into account all issues in both the Toronto Computer Leasing Inquiry and the Toronto External Contracts Inquiry.
2. The review will be conducted confidentially on Inquiry premises. It will begin immediately after the expiry of five full working days following the date of the release of this Ruling, and continue during business hours on consecutive working days until completed.
3. Mr. Lyons and/or his counsel, including counsel's student-at-law, may attend and participate in the review within the time frame set out above.
4. If documents relating to Dell Computer Corporation are discovered, Dell may participate in the review within the time frame set out above.
5. Unhelpful material and privileged material will be returned as soon as possible.
6. Helpful and non-privileged material will be distributed to parties with standing in the usual manner employed by these Inquiries.
7. Helpfulness and privilege issues will be resolved between counsel wherever possible.
8. Materials that are the subject of unresolved helpfulness claims will be placed before me for a ruling. Affected parties may make submissions as I direct.
9. Materials that are the subject of unresolved privilege claims will be placed before the Regional Senior Justice for the Toronto Region, or his designate, for a ruling. Notice of any hearing before the Regional Senior Justice or his designate will be provided to all parties with standing in both Inquiries. It will be for that judge to decide whether intervenor status will be given and whether the hearing will be in camera or in public. Claims for privilege must be accompanied by: a description of the document including the date, type and parties to whom it pertains; a description sufficient to identify the contents without compromising the alleged privilege; and the reason for the privilege claim. Affected parties may make submissions as the Regional Senior Justice or his designate may direct. Without necessarily agreeing that there will not be material facts in disputes, parties are agreed that a proceeding before the Regional Senior Justice or his designate is deemed to be an application pursuant to Rule 14 of the Rules of Civil Procedure.
10. If a notice seeking review of this ruling in any appropriate court is properly served and filed before the eighteen sealed boxes are unsealed in accordance with paragraph 2 above, then the boxes shall remain sealed and stored on Inquiry premises. The sealed boxes shall then be dealt with only as directed by the reviewing court, or by me as authorized by the reviewing court.

[21] In her reasons, the Commissioner observed that "no one has alleged that Commission Counsel's conduct in these Inquiries has disentitled them from assisting me with a confidential review of potentially privileged materials" (at p. 11). She determined that Commission counsel was in the best position to determine relevance and helpfulness, while she also concluded that, given Mr. Lyons' conduct"the perception of these Inquiries by reasonable observers could be adversely affected if Mr. Lyons and his counsel were now entrusted as the sole arbiters of what is relevant, helpful and privileged in the eighteen sealed boxes in the Inquiry offices" (at p. 13).

[22] Subsequent to the Commissioner's ruling, the first application for judicial review was launched. Then on November 12, 2003, the applicant sought to schedule a motion to vary the ruling, relying on an affidavit of Todd White, a member of the law firm Greenspan White. At the first motion, Mr. Lyons had been represented by Richard Auger, another member of that firm. In the motion to vary, the applicant raised grounds that had not been before the Commissioner on October 10, 2003. He alleged that Commission counsel had taken an improperly adversarial approach in dealings with his counsel and claimed that Mr. Auger had been surprised by Commission counsel's failure to include certain correspondence in its record for the October 10 appearance.

[23] Notably, Mr. Auger did not provide an affidavit to accompany the Notice of Motion to Vary. Moreover, an examination of the transcript from the October 10 hearing does not reveal any objection by him with respect to the material filed by Commission counsel, nor any criticism voiced with respect to the conduct of Commission counsel, nor any request for an adjournment.

[24] The Commissioner, through her assistant, advised that she declined jurisdiction over this motion to vary. This resulted in the second application for judicial review.

The First Application for Judicial Review

[25] Pursuant to s. 274(1) of the Municipal Act, if a municipality so requests by resolution, a judge of the Superior Court of Justice shall be appointed to conduct an inquiry into the good government of a municipality or any alleged misconduct with respect to the conduct of public business. Subsection 274(2) confers on the judge the powers of a commission under Part II of the Public Inquiries Act, R.S.O. 1990, c. P.41, as amended. Section 11 of Public Inquiries Act provides that "Nothing is admissible in evidence at an inquiry that would be inadmissible in a court by reason of any privilege under the law of evidence."

[26] Solicitor-client privilege applies to confidential communications between a solicitor and his client which are related to the seeking, forming and giving of legal advice. It is a substantive right that is of fundamental importance in our legal system and protected by s. 7 of the Canadian Charter of Rights and Freedoms as a principle of fundamental justice. In the words of Arbour J. in Lavallee, Rackel and Heintz v. Canada (Attorney General), 2002 SCC 61, [2002] 3 S.C.R. 209, 216 D.L.R. (4th) 257"solicitor-client privilege must remain as close to absolute as possible if it is to retain relevance" (at para. 36).

[27] In that case, the court considered whether s. 488.1 of the Criminal Code, R.S.C. 1985, c. C-46 violated the guarantee against unreasonable search and seizure in s. 8 of the Charter. That section set out a procedure to determine solicitor-client privilege when documents were seized from a law office under a search warrant. In her reasons, Arbour J. emphasized the importance of protecting solicitor-client privilege by adopting a minimal impairment test to measure the reasonableness of state encroachments on solicitor-client privilege. In her words"Such protection is ensured by labeling as unreasonable any legislative provision that interferes with solicitor-client privilege more than is absolutely necessary" (at para. 36).

[28] The applicant takes the position that the procedure adopted by the Commissioner is an unreasonable search and seizure under s. 8 of the Charter and a violation of the principles of fundamental justice under s. 7. He argues that there is a real possibility that the 18 sealed boxes include privileged documents. Initially during the argument of this application, counsel took the position that the only way to minimally impair solicitor-client privilege would be by allowing his solicitor, Mr. Stratas, to inspect the documents with him to determine if privilege existed. Mr. Stratas would then create a list of privileged documents, similar to Schedule B of an Affidavit of Documents under the Rules of Civil Procedure. By the time Mr. Stratas made his reply submissions, he argued that minimal impairment would ensue if he viewed the documents as an agent of Mr. Lyons, rather than as Mr. Lyons' counsel. The argument rests on the assumption that Commission counsel is a third party with a role similar to a Crown prosecutor -- that is, Commission counsel is an agent of the state in an adversarial position vis-…-vis Mr. Lyons. Therefore, the applicant argues that allowing Commission counsel a role in screening the documents would not minimally impair solicitor-client privilege.

[29] The first question in this proceeding is whether privileged documents exist. Solicitor and client privilege may be raised "where such communications are likely to be disclosed without the client's consent" (Lavallee, supra, at para. 18, emphasis added).

[30] Mr. Lyons has provided no affidavit evidence to describe the material which he believes is in the boxes and which may be privileged. On his own evidence before the Commission, which is unchallenged and uncontradicted, he was not acting as a lawyer and not practising law while associated with Morrison Brown Sosnovitch LLP from December 1995 to June 2001. He was, according to his own evidence, a lobbyist. Moreover, he specifically testified that he provided no legal services to MFP, DFS or Dell and acted for them solely as a lobbyist.

[31] Dell appeared by counsel on the October 10, 2003 motion before the Commissioner and submitted that only counsel for the party claiming solicitor-client privilege should review the material in question. However, neither Dell nor any other party for whom the applicant acted joined Mr. Lyons in these applications for judicial review.

[32] On the facts of this case, it appears unlikely that there is material in the sealed boxes which is the subject of solicitor and client privilege. Nevertheless, given that there is a possibility that there may be privileged documents in the boxes, the Commissioner put in place a screening mechanism, with Commission counsel carrying out that task, in the presence of Mr. Lyons and/or his counsel, if Mr. Lyons wishes to participate. The screening mechanism and the reference to a Superior Court judge to determine disputed questions of privilege are designed to protect the Commissioner from reviewing privileged documents.

[33] No one has objected to the Commissioner's jurisdiction to refer the question of privilege to another judge of the Superior Court of Justice -- initially, the Regional Senior Justice in Toronto and subsequently to his nominee, Mr. Justice Nordheimer. In the Walkerton inquiry, on which she modelled her order, a similar process was adopted on consent. Similarly, in Church of Scientology and The Queen (No. 6) (Re) (1985), 1985 3595 (ON SC), 21 C.C.C. (3d) 147, 15 C.R.R. 23 (Ont. H.C.J.), the parties consented to [the] review of allegedly privileged documents by a retired judge. The applicant's factum expresses support for this part of her order. Therefore, given the lack of objection to this part of her order on the part of the applicant, he is taken to have consented to the reference.

[34] On the facts of this case, I am satisfied that the screening process minimally impairs solicitor and client privilege. On the one hand, the claim that there are privileged documents in the boxes is tenuous, given Mr. Lyons' statements about his lobbying activity while at MBS and his failure to give any basis for asserting privilege over the contents of the boxes. On the other hand, the screening process is reasonable, given the facts. The task of screening the documents can not be left to Mr. Lyons, given his past conduct. To give the task to his solicitor is to introduce a stranger into the review process, as Mr. Stratas has no solicitor and client relationship with the individuals whose privileged documents may be in the boxes. He is the solicitor of Mr. Lyons, not those individuals, and therefore, he is in no better position than any other solicitor to conduct the screening process. Moreover, although he is an officer of the court, as Mr. Lyons' solicitor, his duty is to Mr. Lyons, which may put him in a conflict of interest position in reviewing the documents.

[35] No one took issue with the Commissioner's ability to review the documents for privilege. In my view, the Commissioner, a judge of the Superior Court of Justice, has the power to determine whether documents are privileged and, therefore, inadmissible in Commission hearings.

[36] By law, the Commissioner must be a judge of the Superior Court of Justice. He or she has a responsibility to conduct the investigation in such a way as to gather information and make recommendations, while respecting the rights of individuals who are involved in the events under investigation. As Binnie J. stated in Consortium Developments (Clearwater) Ltd. v. Sarnia (City), 1998 762 (SCC), [1998] 3 S.C.R. 3, 165 D.L.R. (4th) 25 at para. 27"A good deal of confidence is inevitably and properly placed in the ability of the Commissioner to ensure the fairness of the inquiry." He went on to state that judicial inquiries are not adversarial, in the sense that there is no lis between the participants (at para. 41).

[37] Both in criminal and civil proceedings, a judge has the authority to determine whether a document is privileged and, therefore, inadmissible. For example, the statutory provision struck down in Lavallee, supra, would have permitted judicial scrutiny of the documents to determine privilege, and the common law procedure for law office searches set out by Arbour J. also envisaged a role for the judge in determining privilege. This would of necessity require the judge to look at the documents. Similarly, rule 30.10(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 permits a judge or master to determine questions of privilege and, in doing so, to examine the documents if he or she finds it appropriate to do so (Ansell Canada Inc. v. Ions World Corp., [1998] O.J. No. 5034 (QL), 28 C.P.C. (4th) 60 (Gen. Div.) at para. 20). In my view, if a judge may inspect potentially privileged documents in the civil litigation context, a judge sitting as a Commissioner in the context of an inquiry under the Municipal Act is also able to do so.

[38] Here, the Commissioner has deputized Commission counsel to screen the sealed documents to determine privilege, in part for reasons of efficiency and in part to shield herself from seeing any privileged documents. In doing so, she commented on the special role of Commission counsel, who, like her, have an obligation of impartiality. In her reasons, she made reference to an article by Associate Chief Justice Dennis O'Connor, who commented on the role of counsel in the Walkerton Inquiry as follows:

It is with the assistance of commission counsel that the commissioner carries out his or her mandate, investigating the subject matter of the inquiry and leading evidence at the hearings. Throughout, commission counsel act on behalf of and under the instructions of the commissioner.

("The Role of Commission Counsel in a Public Inquiry" (2003) 22 Advocates' Soc. J. 10)

The Commissioner also observed that no one in the hearing before her challenged the conduct of Commission counsel.

[39] In my view, the applicant is wrong in his characterization of Commission counsel as an agent of the state who is in an adversarial position, analogous to a Crown prosecutor. Commission counsel is not a prosecutor, nor is an individual such as the applicant deemed to be an adversary of Commission counsel.

[40] The procedure proposed here is very different from the one that was vulnerable in Lavallee, supra. There, the legislation permitted the Crown prosecutor to view the documents prior to the judicial determination of privilege. Moreover, there was a real danger that privileged documents might be disclosed without the client having notice that the documents were in police custody, and the judge was given no discretion to bar the use of privileged information, if no claim of solicitor-client privilege was made within the specified time limits. In the context of a criminal investigation, the Supreme Court held that the procedure did not constitute a minimal impairment of the right to solicitor-client privilege.

[41] Moreover, the Supreme Court of Canada has recently reiterated that the court's decision in Lavallee was designed to protect privilege in a criminal law context. In Maranda v. Richer, [2003] 3 S.C.R. 193, 2003 SCC 67, LeBel J. stated at para. 12:

The aim in those decisions was to avoid lawyers becoming, even involuntarily, a resource to be used in the criminal prosecution of their clients, thus jeopardizing the constitutional protection against self-incrimination enjoyed by the clients.

[42] Here, there is only a possibility that privileged material will be found in the boxes. It was reasonable for the Commissioner to have Commission counsel sift through the material in the boxes, rather than do so herself, given the time required to do such a review and given counsel's obligation of impartiality. The procedure put in place also allows Mr. Lyons and/or his counsel to be present with Commission counsel in order to assert privilege if privileged documents are revealed.

[43] While the applicant has argued that there is an appearance of unfairness because of conflict between Commission counsel and the applicant's counsel, the argument of conflict is irrelevant here. The privilege which he seeks to protect is that of his clients or former clients, and there is no reason to think that there is any conflict between Commission counsel and the individuals who may claim privilege with respect to documents in the sealed boxes. If such material is found, notice will be given to the client, who can then assert the claim of privilege and obtain a ruling, if necessary.

[44] On the facts of this case, I am satisfied that the procedure adopted by the Commissioner in her ruling of October 15, 2003 minimally impairs solicitor-client privilege, and there is no basis to set aside her order.

The Second Application for Judicial Review

[45] At the time of the First Motion, heard on October 10, 2003, Mr. Auger, counsel for Mr. Lyons, did not complain that relevant documents were not before the Commissioner, nor did he allege unfairness or bias on the part of Commission counsel. Counsel for Mr. Lyons commenced the first application for judicial review (654/03) on October 24, 2003, about three weeks before bringing the Motion to Vary the Commissioner's October 15, 2003 ruling. Thus, the Variation Motion sought to vary the October 15, 2003 order, which was already the subject of a pending application for judicial review in the Divisional Court. Under those circumstances, the Commissioner properly declined the request to entertain a Motion to Vary.

[46] Moreover, the Variation Motion appears to be an attempt to put material before the Commissioner which the applicant's counsel could have presented in the first hearing. He argues that the first hearing was marred by procedural unfairness because of Commission counsel's failure to put certain documents before the Commissioner and because of the attitude of Commission counsel. However, his counsel at the hearing chose not to put these documents in his materials, although he had the relevant letters in his possession, nor did he ask for an adjournment on the grounds of surprise or question the conduct of Commission counsel during his submissions. Thus, it appears that the Motion to Vary was an attempt to raise issues that the applicant could have raised at the initial hearing, but which he did not raise. In these circumstances, the Commissioner made no error in refusing to hear the motion. The fact that she did not give reasons is not fatal in the circumstances, as there is no apparent prejudice to the applicant's ability to seek judicial review (see Canadian Civil Liberties Assn v. Ontario (Civilian Commission on Police Services) (2002), 2002 45090 (ON CA), 61 O.R. (3d) 649, [2002] O.J. No. 3737 (QL) (C.A.) at p. 674 O.R.).

Conclusion

[47] In the result, the consolidated application for judicial review is dismissed. If the parties wish to make brief written submissions with respect to costs, they may do so within 30 days of the release of this decision.

Applications dismissed.