1 2 3 4 TORONTO COMPUTER LEASING INQUIRY 5 6 7 8 ******************** 9 10 11 BEFORE: THE HONOURABLE MADAM JUSTICE DENISE BELLAMY, 12 COMMISSIONER 13 14 15 16 17 Held at: East York Civic Centre 18 850 Coxwell Avenue 19 Toronto, Ontario 20 M4C 5R1 21 22 ******************** 23 24 25 October 10th, 2003

2
  1                        APPEARANCES
  2  Ronald Manes   (np)     )Commission Counsel 
  3  David Butt              )
  4  Chris Thiesenhausen     )
  5  Patrick Moore  (np)     )
  6  Daina Groskaufmanis (np)) 
  7  
  8  Linda Rothstein (np)    )City of Toronto 
  9  Ian Roland              )
 10  Andrew Lewis            )
 11  Lily Harmer    (np)     )
 12  Robert Centa   (np)     )
 13  Gordon Capern  (np)     )
 14  
 15  David Moore    (np)     )MFP 
 16  Fraser Berrill  (np)    ) 
 17  Ken Jones      (np)     ) 
 18  
 19  Raj Anand      (np)     )Lana Viinamae
 20  Bay Ryley      (np)     )
 21  
 22  William Anderson  (np)  )Wanda Liczyk
 23  
 24  Valerie Dyer            )Dell Computers
 25  Jennifer Lynch  (np)    )

3
  1                          APPEARANCES
  2  Edward Greenspan (np)   )Jeff Lyons
  3  Richard Auger           )
  4  Todd White      (np)    )
  5  
  6  Hugh MacKenzie   (np)   )Jim Andrew
  7  Jennifer Searle  (np)   )
  8  
  9  Bryan McPhadden (np)    )Brendan Power
 10  
 11  Dorothy Button          )Registrar
 12  
 13  
 14  
 15  
 16  
 17  
 18  
 19  
 20  
 21  
 22  
 23  
 24  
 25

1 TABLE OF CONTENTS 2 Page 3 4 Exhibits 5 5 6 Commission Counsel's Application 8 7 8 Certificate of Transcript 194 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

1 LIST OF EXHIBITS 2 No. Description Page No. 3 4 1 VOLUME I Bound document titled 9 5 "Commission Motion 6 Documents" Tabs 1-47 7 8 2 VOLUME I Bound document titled 9 "Compendium of Correspondence 10 regarding Commission Counsel 11 request to review privileged 12 and irrelevant documents" 13 Tabs 1-9 193 14 15 16 17 18 19 20 21 22 23 24 25

1 --- Upon commencing at 9:00 a.m. 2 3 THE REGISTRAR: The Hearing is now open, 4 please be seated. 5 MADAM COMMISSIONER: Good morning. Good 6 morning, Mr. Butt. 7 MR. DAVID BUTT: Good morning, Commissioner. 8 Commissioner, as you're aware, this morning we are dealing 9 with a motion brought by Commission Counsel for access to 10 nineteen (19) sealed boxes that are currently just down the 11 hall in Commission Counsel's office space. 12 And -- 13 MADAM COMMISSIONER: Is Mr. Auger here, for 14 Mr. Lyons? He just stepped out? 15 MR. DAVID BUTT: I'm sorry, I didn't -- didn't 16 notice he had stepped out. Yes, he is here, and we -- we 17 chatted before the Hearing began. 18 MADAM COMMISSIONER: All right, well let's 19 wait until he gets here. 20 MR. DAVID BUTT: Sure. 21 22 (BRIEF PAUSE) 23 24 MR. IAN ROLAND: While we're waiting, 25 Commissioner, let me introduce myself, my name's Ian Roland,

1 and I appear on behalf of the City. 2 MADAM COMMISSIONER: Good morning, Mr. Roland. 3 MR. IAN ROLAND: And with me is my partner, 4 Andrew Lewis, who also appears. 5 MADAM COMMISSIONER: Thank you. And just so 6 you know, Mr. Roland, since this is your first time here, 7 we're -- we're operating with microphones, and so if you 8 stand we -- I appreciate the deference, but we won't be able 9 to hear you on the -- on the transcript. 10 MR. IAN ROLAND: Thank you, I will remain 11 seated. 12 MADAM COMMISSIONER: And here's Mr. Auger. 13 MR. RICHARD AUGER: Good morning. 14 MADAM COMMISSIONER: Good morning, you're -- 15 you're Richard Auger? 16 MR. RICHARD AUGER: Richard Auger here for Mr. 17 Lyons. 18 MADAM COMMISSIONER: Good morning, Mr. Auger. 19 Good morning. 20 We actually would not have started without 21 you, it was -- my -- I guess my deputy didn't know that you 22 weren't here, and I was already in the room before we 23 realized that you weren't here. 24 MR. RICHARD AUGER: Thanks very much. 25 MADAM COMMISSIONER: All right, no problem.

1 Okay, so we have Mr. Butt for Commission Counsel? 2 MR. DAVID BUTT: Yes, thank you, Madam 3 Commissioner, and I should say at the outset that I'm here on 4 behalf of the two (2) Commissions of Inquiry, that you, Madam 5 Commissioner, are charged with and for ease of reference, if 6 it's necessary to refer to both of them, I'll -- I'll 7 distinguish the -- the two (2) as TCLI, which is the Toronto 8 Computer Leasing Inquiry, dealing with the MFP matters, and 9 then TECI, the Toronto External Contracts Inquiry, dealing 10 with the matters that are coming up later, after the MFP 11 Inquiry is finished. 12 The first thing I'd like to do to assist you, 13 Madam Commissioner, is to provide to the Registrar, and enter 14 as Exhibits, the book of documents that has been prepared by 15 Commission Counsel in -- in preparation for this motion, it's 16 a black binder labelled Commission Motion Documents, and it 17 consists of correspondence and transcript references. 18 And I understand that everybody has now 19 received a copy of it and so, I would propose that that be 20 marked for purposes of this motion. 21 MADAM COMMISSIONER: All right. 22 23 (BRIEF PAUSE) 24 25 MR. DAVID BUTT: My suggestion would be, I'm

1 in everyone's hands, but if we called it Exhibit number 1 on 2 this motion. 3 MADAM COMMISSIONER: On the motion. 4 MR. DAVID BUTT: Then we're in a position to 5 identify the document readily without confusion, in the event 6 that there are other proceedings related to this motion 7 elsewhere. 8 MADAM COMMISSIONER: Okay. 9 10 --- EXHIBIT NO. 1 VOLUME I: Bound document titled 11 "Commission Motion Documents" 12 Tabs 1-47 13 14 MR. DAVID BUTT: As is often the case, there 15 are a couple of items to add to the document binder, and I'm 16 content that they simply be added to the binder, or they can 17 be marked separately, I don't have any strong preference, but 18 just as a matter of -- of housekeeping, there should be added 19 to the motion materials, the two (2) summons' that were 20 served on Mr. Lyons himself. 21 Obviously the summons' were served, which led 22 to the request to produce. 23 The first summons served on Mr. Lyons was 24 provided in the usual manner by Commission Counsel during an 25 interview with Mr. Lyons in the summer of 2002 and it is

1 dated August 14th. 2 A second summons was provided to Mr. Lyons in 3 December of 2002 and it's dated the 22nd of November. I have 4 provided copies to all counsel present here today, and I 5 would ask that those few documents become part of the 6 document binder. 7 MADAM COMMISSIONER: All right, there are 8 forty-five (45) documents right now, so why don't we have 9 those be forty (40) -- forty-six (46), do you want them both 10 as one (1), or as two (2)? 11 MR. DAVID BUTT: Both as one (1) is fine, 12 just -- 13 MADAM COMMISSIONER: All right. 14 MR. DAVID BUTT: -- so we all know where to 15 find the summons'. 16 MADAM COMMISSIONER: Okay, so they'll be Tab 17 46? 18 MR. DAVID BUTT: Yes. And in addition, I have 19 prepared a list, the boxes, as I mentioned earlier are 20 sealed, and of course will remain sealed until an appropriate 21 order is carried out, but in the interim, and to assist 22 everyone in dealing with the boxes, I have provided a list of 23 what is written on the outside of each box. And I've 24 provided that as well to counsel, and to Madam Registrar, and 25 an extra copy for you, Madam Commissioner.

1 MADAM COMMISSIONER: Okay. 2 MR. DAVID BUTT: And so, I would propose if 3 we're going consecutively, that be forty-seven (47) in the 4 document book. 5 MADAM COMMISSIONER: All right. 6 MR. DAVID BUTT: And for the benefit of 7 everyone, we can get the tabs at an appropriate time so you 8 can take away at least a tab set. 9 MADAM COMMISSIONER: Okay. 10 MR. DAVID BUTT: Lastly, in terms of 11 additional material, there is a -- a letter written February 12 14th, 2003, which contains much material, it's a three (3) 13 page single spaced letter that's not relevant to these 14 proceedings, but, it does have one (1) paragraph that I 15 propose be added to the record of these proceedings. 16 And I do not propose to put the whole letter 17 before the Court, but, perhaps if I might, just to assist 18 everybody in understanding how it fits in. 19 If I could deal with that passage and read it 20 into the record, at the appropriate time in my submissions 21 when I deal with the chronology of events that has us here. 22 MADAM COMMISSIONER: And this is a letter from 23 whom to whom? 24 MR. DAVID BUTT: It's a letter from Commission 25 Counsel, Mr. Manes, to Mr. Greenspan, Counsel for Mr. Lyons.

1 MADAM COMMISSIONER: All right. 2 MR. DAVID BUTT: What I would like to do now, 3 if I could briefly please, Madam Commissioner, is -- this is 4 Commission Counsel's Motion, so I'd like to address the issue 5 on the Motion. 6 And just to let everybody know in advance, 7 what I propose to do with probably the twenty (20) or twenty 8 five (25) minutes, that I'll ask you to listen to me. The 9 first thing I'd like to do is to set out a little bit of the 10 chronology. 11 Obviously, there are a number of letters 12 tabbed in the materials that do provide a comprehensive 13 written account of the chronology that brings us here. I 14 would like to just highlight certain of those events in the 15 chronology to help everybody understand where we are in this 16 Motion. 17 The second thing I would like to do -- during 18 the course of that chronology, I should add that I'll be 19 dealing with both letters and transcripts of Mr. Lyons 20 testimony and in a certain sense, juxtaposing the letters and 21 the transcripts so that we all have a sense of how the two 22 (2) inter-related. 23 Second thing that I'd like to do is refer to 24 the law that I have provided in the black binder, that I 25 believe everybody has, as a way of speaking about what I

1 submit is the appropriateness of the Order that we're 2 submitting, should be given or a ruling permitting access to 3 the boxes. 4 And then thirdly, I'll just talk about the 5 terms of the Order that we are requesting and again the terms 6 of the Order are essentially, with just minor modifications, 7 already found in the correspondence. So, it's nothing that 8 anybody hasn't had prior access to. 9 Dealing then with the correspondence and the 10 history of this matter. Obviously initially the summons were 11 served on Mr. Lyons, at his interview in August and again in 12 December. 13 So, the point in my submission to be taken 14 away from the initial service of the summons, is that it has 15 been months now that everybody has known that the Commission, 16 would like to have from Mr. Lyons, relevant documentation. 17 It's fair to say that following those summons, 18 there was voluminous correspondence and ongoing dealings on a 19 number of issues, but, in February that is February 14th, 20 2003, again in the context of discussion of many, many 21 matters, some of which were the subject matter of agreement, 22 some of which were not, Commission Counsel, did communicate 23 with Mr. Greenspan for Mr. Lyons, about documents at Morrison 24 Brown Sosnovitch. 25 And I'll just read the relevant passage from

1 the February 14th, 2003 letter from Mr. Manes to Mr. 2 Greenspan, that expresses Commission Counsel's views on the 3 need to go to Morrison Brown Sosnovitch and determine whether 4 or not, there's relevant documentation there. 5 The passage is as follows, it's at the top of 6 a third page of a letter that deals otherwise with matters, 7 as I said, not relevant. 8 And I'm quoting: 9 "I know [this is Mr. Manes speaking], 10 speaking to your office and I address this 11 below, that your office has been monitoring 12 the Hearings ongoing to date. Since my 13 December 6th letter several witnesses have 14 given evidence, some of which involves your 15 client, e.g. the evidence of Irene Payne 16 which I also address below. 17 In light of that evidence, we would expect 18 that you have inquired of Mr. Lyons' 19 business entity under which he practised as 20 a lobbyist and or his former law firm, 21 Morrison Brown Sosnovitch, seeking relevant 22 documents. 23 We would expect that you will produce all 24 of the relevant documentation related to 25 Ms. Payne's evidence including, for

1 example, the retainer agreements with MFP, 2 Dell Financial Services and Dell Computer." 3 The letter does then go on to discuss other 4 evidence and other matters but I ask that that portion be 5 part of the record simply to demonstrate that there has been 6 communication around the issue of going to Morrison Brown 7 Sosnovitch. 8 MADAM COMMISSIONER: Just speaking of Dell 9 Computer, I've been remiss in not acknowledging Ms. Dyer here 10 today. Welcome back, Ms. Dyer. 11 MS. VALERIE DYER: Thank you, good morning. 12 MADAM COMMISSIONER: On behalf of Dell 13 Computer Corporation. 14 MS. VALERIE DYER: Yes. 15 MR. DAVID BUTT: That February 14th letter is 16 also helpful in that at Tab 1, if we turn to the motion 17 materials, we have the beginnings of a series of 18 correspondence back and forth between Commission Counsel 19 directly and Morrison Brown Sosnovitch. 20 And I can advise you, Madam Commissioner, that 21 March 7th, some three (3) weeks after the February 14th 22 letter, we had not received any indication, one way or 23 another, as to whether Mr. Lyons had or had not made any 24 inquiries of Morrison Brown Sosnovitch. The February 14th 25 letter, therefore, helps to put this March 7th approach to

1 Morrison Brown Sosnovitch in context. 2 Commissioner Counsel is, in my submission, 3 taking it upon themselves to explore with Morrison Brown 4 Sosnovitch what, if anything, might be located there and Tab 5 1 is simply, I don't mean to go into any detail in it, a 6 fairly standard letter that Commission Counsel sent out many 7 times, adapted for this particular request, but it's 8 essentially the usual letter explaining the Inquiry, 9 including the Terms of Reference and a summons, and 10 requesting documents. 11 Tab 2, March 26th. Morrison Brown Sosnovitch 12 gets back to Mr. Manes and it's apparent from the text of 13 that letter that there has been some conversation and an 14 agreement as to how the return of documents can occur and 15 that's found at the bottom of page 1 of Tab 2 which is 16 consecutively numbered page 12. 17 And I -- I draw attention to this last 18 paragraph at the bottom of page 12 simply to highlight that 19 Commission Counsel's position has been consistent throughout 20 from our earliest contact with Morrison Brown Sosnovitch. We 21 have always been agreeable to having the documents, if there 22 are any that may be relevant, produced sealed. Commission 23 Counsel would then review those documents confidentially. 24 If there is anything relevant in there the 25 question of privilege would be addressed. In terms of an

1 order of operations, it's always been Commission Counsel's 2 position that one should first assess relevance because if 3 nothing is relevant that's the end of it; everything gets 4 returned. 5 Only if there is something that could 6 potentially be of assistance to you, Madam Commissioner, 7 would we spend time and taxpayers' money addressing privilege 8 issues. 9 MADAM COMMISSIONER: Just with respect to 10 that, our rules don't actually refer to relevance 11 specifically, it goes with helpfulness. 12 MR. DAVID BUTT: Yes. 13 MADAM COMMISSIONER: So I'm assuming you're 14 using the two interchangeably then; are you? 15 MR. DAVID BUTT: Yes. And thank you for that 16 correction. I should be using the term "helpfulness". And I 17 may have been led astray in that by looking down at the 18 documents. I spoke -- which mistakenly uses the word 19 "relevant". 20 Also of interest, because I'll be returning to 21 this, is on the second page of that letter Morrison Brown 22 Sosnovitch advising two (2) things. First of all, their 23 awareness that there were matters in which, Mr. Lyons, worked 24 outside the scope of his employment as Counsel to the firm. 25 And the initial position of Morrison Brown

1 Sosnovitch, is that they have no knowledge or records of 2 these matters and that's at the top of page 13. 3 4 (BRIEF PAUSE) 5 6 MR. DAVID BUTT: So, that does, as the 7 correspondence will unfold, show that the picture is a little 8 bit more complicated than simply searching for all the files 9 that Mr. Lyons -- through all the files that Mr. Lyons may or 10 may not have opened as a lawyer. 11 We -- the second thing of note on page 13 at 12 Tab 2, is Morrison Brown Sosnovitch indicates initially that 13 they do not have any physical files pertaining to any of the 14 parties named in the letter and the summons Commission 15 Counsel sent. 16 Now, as we will find out as we go forward, 17 that initial impression, turned out not to be the case, but, 18 certainly the initial request came back to us with that 19 answer. 20 In the background to all this, is the approach 21 to Mr. Lyons evidence and again, Madam Commissioner, it would 22 be helpful for everyone to keep in mind that, Mr. Lyons, 23 testified May 8th, 12th, 13th and 14th. 24 So, in March and into April, we're into what 25 could be called, I suppose, the lead up period to Mr. Lyons

1 testimony and again, that helps to contextualize Commission 2 Counsel's search for relevant documentation. 3 So, on April 8th, which is Tab -- a letter 4 found at Tab 3 of the materials, we have Mr. Manes, again 5 asking for Morrison Brown Sosnovitch and I'll quote: 6 "To please advise me formally as to whether 7 your firm has any hard copies or electronic 8 documents or communication which may be 9 relevant to the Inquiry. And by that I 10 mean helpful to the Inquiry." 11 And goes on to say, what I have just 12 explained: 13 "The group of witnesses involving Mr. Lyons 14 will be heard shortly. So the Commission 15 would appreciate a response." 16 And at Tab 4, a response comes back, it is 17 dated April 9th. And it says: 18 "We enclose herewith -- 19 This is again from Morrison Brown Sosnovitch, 20 April 9th: 21 "-- an index of materials in our possession 22 with respect to the summons being provided, 23 again while preserving our claim for 24 privilege." 25 Now, I mention the date because it becomes

1 important. If we turn the page and look at the letter of May 2 15th, we see Mr. Manes saying on May 15th, which importantly 3 is after Mr. Lyons has finished testifying. 4 He testified the 8th, 12th, 13th and 14th of 5 May. So on May 15th, Mr. Manes is writing back to Mr. 6 Sosnovitch and saying: 7 "Thank you for your letter of April 9th. 8 As I explained this letter was not in our 9 files." 10 Commission Counsel's fault. I'm sure Morrison 11 Brown Sosnovitch sent the letter, but, for reasons that we 12 can't attribute to anyone else, but, our internal processes, 13 we were not aware of that letter, until after Mr. Lyons had 14 testified. 15 And I mention that because when I get to the 16 transcript of the testimony, certain questions are or are not 17 asked that appear to possibly have this as an explanation. 18 But, in any event, turning to the -- 19 MADAM COMMISSIONER: Just, if I might, Mr. 20 Butt, on page 17, is the list of Jeffrey Lyons material re: 21 Toronto Computer Leasing Inquiry, and there's actually 22 nothing on my sheet. Is -- 23 MR. DAVID BUTT: Yes, thank you for bringing 24 that to my attention. I'll deal with it now. I've discussed 25 it with the other parties.

1 Obviously, this motion has a limited purpose 2 in that the sole order being sought is to unseal and 3 confidentially review boxes of documents. 4 We all anticipate and indeed, Morrison Brown 5 Sosnovitch has anticipated since day one in our 6 correspondence with them that privilege issues might arise. 7 We don't know because we haven't looked at the documents. 8 However, anticipating that privilege issues 9 might arise, we've taken the step in these motion materials 10 of removing from the public copies anything in the 11 correspondence that identifies particular documents and I 12 hope we've been thorough in that respect. 13 Again, that is obviously intended to preserve 14 everybody's right to assert whatever privilege might attach 15 to any of those documents. And if it assists, for the 16 benefit of counsel here alone, I do have the letters that 17 have been redacted here in the courtroom with me with the 18 redactions underneath little post-its so that everybody, if 19 they wish, can confidentially inspect what I have redacted 20 and what's behind the redactions. 21 So that's the purpose in removing that 22 information. It's to preserve the ability to make any 23 privilege claims that might arise. 24 MADAM COMMISSIONER: Okay. So, I'll hear from 25 Mr. Auger on that component later on once he has an

1 opportunity. 2 MR. RICHARD AUGER: I'm happy to make one 3 comment on that. 4 MADAM COMMISSIONER: I'm sorry. You weren't 5 here when I mentioned to Mr. Roland because these are taped, 6 we have to -- I appreciate the deference in your standing, 7 but I actually have to ask you to sit -- 8 MR. RICHARD AUGER: Very well. 9 MADAM COMMISSIONER: -- because otherwise we 10 can't hear you through the -- 11 MR. RICHARD AUGER: Thank you very much. 12 MADAM COMMISSIONER: -- microphone and the 13 court reporters can't pick up anything. 14 MR. RICHARD AUGER: Thank you very much. I'm 15 happy to make one comment. I think that's an important point 16 that you point out, Commissioner. I have one point on that, 17 I'm happy to make it now or later. I don't want to interrupt 18 Mr. Butt. 19 I had one impression that our agreement was a 20 little different from that in that we had a discussion about 21 the purpose of the materials being redacted and I'm happy to 22 make that comment now. 23 MADAM COMMISSIONER: If you think it would be 24 helpful for me now, I'm happy to hear it now. If you want to 25 save it for your submissions, I'm happy to hear it then;

1 whatever you think is best, but if you think it would be 2 helpful now I -- 3 MR. RICHARD AUGER: I think it's an important 4 point -- 5 MADAM COMMISSIONER: Okay. 6 MR. RICHARD AUGER: -- and you'll see that 7 Mr. Butt has, in the index, noted that some -- well, Tab 4, 8 Tab 5, Tab 6, Tab 10 have portions that were redacted and I 9 discussed this with Mr. Butt this morning and I thought that 10 we'd agreed that, without getting into reviewing the content 11 of what was redacted and coming up with submissions on that 12 issue, because this isn't a privilege motion today in my 13 respectful submission, that we had agreed that we would tell 14 you that the materials were redacted because they are 15 privileged and that Commission Counsel had agreed that they 16 would be removed from this exercise and would concede that 17 the material's redacted because it's privileged material. 18 That's what I understood and if I'm wrong we 19 can discuss that at the break but that's what I understood 20 was the purpose in it being redacted and that we would go 21 forward on the basis that any of the material that is 22 redacted was privileged. 23 MR. DAVID BUTT: Yeah, I have to say I've a 24 different understanding because I haven't looked at those 25 materials with a view to ascertaining whether privilege may

1 or may not attach. As I mentioned earlier in the 2 submissions, conceptually the first order of business is to 3 ascertain relevance and that's why this is not a privilege 4 motion. 5 So we would -- I would expect if we ever look 6 at this material, assess relevance first and if it's 7 irrelevant we don't even need to go to the privilege issue 8 and then only go to the privilege issue if relevance 9 determines that they might be helpful to you, Madam 10 Commissioner. 11 So, but having said that, we obviously have to 12 think a couple of steps down the road at this motion and for 13 that reason I'm quite content that no reference be made to 14 anything in case it does turn out to be privileged. I'm 15 simply not in a position to prejudge the legal quality of 16 those documents when I haven't seen them. 17 MADAM COMMISSIONER: Right. Okay. I -- are 18 you content with that Mr. Auger. What I hear Mr. Butt saying 19 is that for the purposes of today, he will deal with them as 20 though they are privileged but we have no -- am I getting 21 that wrong, Mr. Butt? 22 MR. DAVID BUTT: That's fair. 23 MADAM COMMISSIONER: That he'll deal with them 24 as though they are privileged though he has no idea of 25 whether they are or not because we're only dealing today with

1 what is helpful for me. 2 MR. RICHARD AUGER: Thank you. 3 MADAM COMMISSIONER: I think I got that right. 4 Okay. 5 MR. DAVID BUTT: Thank you. Now, if I could 6 just continue in the chronology and let everybody know that 7 I'm not going through every Tab, I'm only going to deal with 8 the Morrison Brown Sosnovitch correspondence in any detail. 9 The bulk of the correspondence, is between Mr. 10 Lyons' Counsel and Commission Counsel, around the events that 11 lead up to this Motion. 12 So, I'm close to finishing the relevant 13 chronology in the correspondence, but, before I leave the 14 April 9th letter, which as I explained didn't come to 15 Commission Counsel's attention until much later, we have 16 what's important to note, a second response from Morrison 17 Brown Sosnovitch saying, contrary to what we earlier thought, 18 hey yeah, we have found some stuff. 19 20 (BRIEF PAUSE) 21 22 MADAM COMMISSIONER: And where is that? 23 MR. DAVID BUTT: That is Tab 4, page 16. And 24 the items are listed. 25

1 (BRIEF PAUSE) 2 3 4 MR. DAVID BUTT: Now, just to follow through 5 briefly for a moment with correspondence after the testimony 6 is over on May 15th, we have Mr. Manes then able to write 7 about the testimony, not only of Mr. Lyons, but, the 8 testimony of Ms. Sue Cross, who was at some relevant times an 9 employee of Mr. Lyons and did have some insights into the 10 existence of material at Morrison Brown Sosnovitch. 11 So, at Tab 5, Mr. Manes is able to write to 12 Mr. Sosnovitch and say, I know something now that I didn't 13 know then, when I wrote to you before Mr. Lyons testified. 14 And he says at the bottom of page 18, at Tab 15 5, the beginning of the middle paragraph: 16 "Both Mr. Lyons and a former Morrison Brown 17 Sosnovitch employee, Sue Cross, have 18 testified that Dell Computer and Dell 19 Financial Services were separate files and 20 that therefore there might be separate 21 storage." 22 Over onto page 19: 23 "Mr. Lyons has testified that his files 24 included correspondence and memoranda 25 produced using computers owned by the law

1 firm and these computers were left behind 2 when he left the firm and Ms. Cross 3 testified that she recalls some of Mr. 4 Lyons files were sent to storage, to the 5 same facility used by Morrison Brown 6 Sosnovitch." 7 So, as a result of the testimony, it's fair to 8 say that we have more information to assist Morrison Brown 9 Sosnovitch in conducting their search. 10 And on May 23rd, Morrison Brown Sosnovitch, is 11 in a position through Mr. Lyons testimony -- 12 MADAM COMMISSIONER: This is at Tab 6? 13 MR. DAVID BUTT: Yes. And our more detailed 14 requests that also flowed from Mr. Lyons testimony, to 15 conduct a more comprehensive search and indeed much more 16 material is found. 17 And I'll deal with this letter before jumping 18 to the testimony. First of all they've conducted a further 19 search, that's item number one (1) on page 20 of the Morrison 20 Brown Sosnovitch letter. 21 "A further search of our firms closed files 22 which are stored offsite." 23 And the offsite storage issues is going to 24 become important when we turn to the testimony and indeed 25 they found one (1) physical file, under Dell Financial

1 Services, general matters. 2 As you know, Madam Commissioner, items from 3 that file have already been entered in TCLI. 4 MADAM COMMISSIONER: I'm not sure that they 5 would -- 6 MR. DAVID BUTT: Or referred to, at least. 7 MADAM COMMISSIONER: I think some were 8 referred to and some were entered into it as Exhibits. 9 MR. DAVID BUTT: Right. Secondly, Morrison 10 Brown Sosnovitch, first identifies twenty one (21) boxes of 11 files marked, quote: 12 "Jeffrey Lyons personal." 13 14 (BRIEF PAUSE) 15 16 MR. DAVID BUTT: And the third point of 17 interest in that letter over on page 21 18 "As was ..." 19 It's the second full paragraph, Morrison Brown 20 Sosnovitch writing 21 "As was presented into evidence by Mr. 22 Lyons and Ms. Cross to the Inquiry and as 23 we determined subsequent to Mr. Lyons' 24 departure, there were apparently matters 25 which Mr. Lyons billed outside of our

1 firm." 2 So that provides some assistance and insight 3 in why, initially, Morrison Brown Sosnovitch did not have a 4 sense that these materials might have existed. Now, I'm not 5 saying that's conclusive but it's an insight that's expressed 6 in this letter that may be of some assistance as to why it 7 did take a little while to find this material. 8 So keeping in mind that this material was 9 apparently outside the scope of counsel work or may have 10 been, but was, nonetheless conducted, and was physically 11 stored off-site, those are the three (3) important points 12 that, in my submission, it is important to keep in mind at 13 this point, we need to turn to the -- to the testimony of Mr. 14 Lyons on the issue of documents. 15 And for that I'm going to be referring to Tab 16 39 and Tab 45 of the evidence and those are the only 17 transcript extracts that I'm going to be referring to. So, 18 at Tab 39, I'll pause to mention that Tabs 41 to 44 address 19 the issue of whether Mr. Lyons was acting as a lawyer or a 20 lobbyist which, again because this is not a privilege motion, 21 is not something that needs to be dealt with in any detail 22 now. 23 So, thirty-nine (39) and forty-five (45) are 24 the two (2) relevant tabs on the issue of material at 25 Morrison Brown Sosnovitch and, as everyone sees from looking

1 at those tabs, they're four (4) pages per photocopied page 2 and I apologise to everyone, including myself, for the size 3 of the font. 4 But, on page 6, which is the top left page 5 three (3) pages in at Tab 39, we have Mr. Manes asking at 6 line 18 7 "Q: Do you have any files, faxes, 8 memorandums, letters, retainer agreements, 9 anything in relation to the representation 10 of Dell Computer and Dell Financial? 11 A: No." 12 And, of course, as we know because this 13 material has been referred to -- subsequently located and 14 referred to, and first identified in that May 23rd letter 15 from Morrison Brown Sosnovitch, that answer is factually 16 incorrect. That material was there. 17 Next question, page 7 18 "Q: When you left Morrison Brown 19 Sosnovitch you took the MFP file, what 20 happened to the Dell Financial file? 21 A: Well, normally we don't keep files once 22 we cease acting for clients." 23 And up at the top of page 8, line 9. 24 "Well, we try to weed them out if we're not 25 using them and we try to do that within a

1 few weeks or months of acting for them." 2 And then the question is 3 "Q: Do you recall whether you specifically 4 gave the instruction to destroy those files 5 to the best of your recollection? 6 A: Probably." 7 And, again, that turns out to be factually 8 incorrect, vis-a-vis the Dell Financial Services file or DFS. 9 In any event, the question continues 10 "Q: Those files are not available, you've 11 looked for them? 12 A: Yes. I did." 13 And Mr. Manes goes on to say 14 "Q: Now, we've inquired of Morrison Brown 15 Sosnovitch, they've gotten back to us and 16 said they didn't have them?" 17 And that's where I ask, Madam Commissioner, 18 that we keep in mind the flow of correspondence with Morrison 19 Brown Sosnovitch, initially they did find nothing. And it 20 was only after the testimony was over, that it came to our 21 attention, specifically the May 23rd letter and the April 9th 22 letter, that we didn't see May 15th, that there was material. 23 And then just below on page 9, 24 "Do you remember taking the Dell Financial 25 or Dell Computer files.

1 A: Not Dell Financial, again or DFS." 2 Now, in my submission, it's important to pause 3 there and turn to Tabs 12 and 14, keeping that evidence in 4 mind, let's turn to Tabs 12 and 14. What do we find? 5 At Tab 12, July 4th, we have Mr. Manes asking: 6 "Please advise me whether Mr. Lyons has, at 7 any time, requested from your Firm, any 8 materials relevant to these inquiries. 9 Also please advise us of the Firm's 10 policies on retention and storage of 11 documents, as they apply to Mr. Lyons 12 during the time when Mr. Lyons was 13 associated with your Firm as counsel." 14 That's Tab 12, page 31. If we skip to Tab 14, 15 page 33, second last paragraph, the response to Mr. Manes 16 questions: 17 "I advise that Mr. Lyons has not at any 18 time, to our knowledge, requested from this 19 Firm, any materials relevant to the 20 Inquiry." 21 Just below that, answer to the second 22 question: 23 "The Firm's policy on retention and storage 24 of documents is the same today as was the 25 policy during the time that Mr. Lyons was

1 associated with our Firm as Counsel." 2 Over the page: 3 "The policy is that upon completion of a 4 matter as determined by the lawyer in 5 charge, the file is closed out, documents 6 are returned to the client as appropriate 7 and the file is then assigned a file number 8 and ultimately deposited in the Firm's 9 storage facility." 10 So, we have a very clear response back, that 11 no, there was no request and that the policy, which was in 12 place, at the relevant time, was to keep files at the Firm's 13 storage facility. 14 And if we think back now, to the May 23rd 15 letter, they opened that May 23rd letter, by saying we've 16 checked the Firms storage letter and we found the stuff, so, 17 indeed, it was right where Morrison Brown Sosnovitch said, as 18 a matter of course, it should be. 19 MADAM COMMISSIONER: It goes on to say that 20 they have no record of any instruction from Mr. Lyons to 21 destroy any of the files. 22 MR. DAVID BUTT: That's correct. And if we go 23 back then to page 72(b) and Tab 39, we are able to return the 24 question: 25 "Do you recall whether you specifically

1 gave instruction to destroy those files." 2 The answer being: 3 "Probably." 4 Again, a perspective of Morrison Brown 5 Sosnovitch as stated in the letter, is precisely the contrary 6 and again Tab 39, page 8 of the four (4) pages at the top 7 right, line 20: 8 "In any event, those files aren't available 9 you've looked for them? 10 A: Yes, I did." 11 Again, a very different perspective from 12 Morrison Brown Sosnovitch. 13 Despite the fact, that just below on page 9, 14 it is acknowledged that it was left there. If the file was 15 left at Morrison Brown Sosnovitch, there's only one (1) place 16 to look for it; Morrison Brown Sosnovitch. 17 Mr. Lyons said he looked for it. Morrison 18 Brown Sosnovitch said he did not. 19 20 (BRIEF PAUSE) 21 22 MR. DAVID BUTT: And over the top of the next 23 page in Tab 39, essentially through incomplete sentences, one 24 (1) can derive meaning that that exchange was repeated. 25 "Q: In any event, you've done a search and

1 those files are not -- 2 A: Right. No." 3 Verbally it's not as clear as it might be, but 4 a fair reading would be that, again, there's a repeated 5 assertion that he looked for them and they're not there and 6 in relation to the Dell Financial Services file, at least, 7 that is incorrect. 8 If I can turn now to Tab 45, again, keeping 9 the Morrison Brown Sosnovitch letters after this testimony in 10 mind. At the first page behind Tab 45 which is consecutively 11 numbered 89 in handwriting at the top and then if we look at 12 the bottom left transcript page of the four (4) on 89, we're 13 looking at page 107. 14 And this is cross-examination by Ms. Rothstein 15 for the City of Toronto. 16 "Q: Are you saying, Mr. Lyons, that the 17 lobbying files like Dell and the DFS file 18 were all opened in the name of MBS, the law 19 firm? 20 A: That's my recollection." 21 So, again, we have an acknowledgment here by 22 Mr. Lyons that he is aware that those files, in terms of 23 their labelling, were associated with MBS. And, again, we 24 juxtapose that with Morrison Brown Sosnovitch's assertion 25 that he never inquired of MBS.

1 Again, he repeats down at line 13 on the same 2 page 3 "If it was lobbying, it would generally be 4 in the firm of Morrison Brown Sosnovitch. 5 I've answered that." 6 Then on page 109 another relevant passage. 7 Line 11 8 "Q: You testified on Thursday that you 9 destroyed your DFS file shortly after your 10 retainer ended? 11 Again, 12 "A: Yes." 13 Again, we know that to be factually incorrect 14 and down below 15 "Q: You did not personally destroy that 16 file? 17 A: No. 18 Q: You would have directed someone to do 19 that? 20 A: One of my staff." 21 And, again, as Madam Commissioner has pointed 22 out, Morrison Brown Sosnovitch has no record of any direction 23 to destroy and, of course, I just pause at this stage to take 24 a step back. Inside a law firm environment one might well 25 expect, given retention obligations, that destruction orders

1 would be recorded in some way. 2 One can't say with certainty that that would 3 necessarily be the case 100 percent of the time but it's 4 certainly something that one might well expect. Then, if we 5 turn the page to page 91 of the consecutively hand-numbered 6 pages, again at Tab 45, and we get into some more detail. 7 Again, the bottom left page, page 115 we have 8 Ms. Rothstein asking 9 "Q: Were you using MBS computers, 10 Mr. Lyon? 11 A: Not me. 12 Q: Your staff? 13 A: They were using a computer. Yes. 14 Q: Owned by MBS? 15 A: Yes. 16 Q: Left at MBS when you departed MBS? 17 A: Could have been, I think, at the time. 18 Further down, page 19 -- I'm sorry, line 19 19 same page, 115, bottom left. 20 Q: The computers that were used to 21 generate documents in 1999 remained the 22 property of MBS when you departed? 23 A: I would assume so. 24 Q: Did you take that electronic data with 25 you when you left, sir?

1 A: No. No." 2 Again, knowledge that that is a likely source 3 of material juxtaposed with Morrison Brown Sosnovitch's 4 assertion in Tab 14 that he never inquired. Top of the same 5 page, top right, which is transcript page 116: 6 "Have you made any inquiries of MBS to 7 determine the whereabouts of that 8 electronic data? 9 A: Yes." 10 Answer is inconsistent with what Morrison 11 Brown Sosnovitch tells us. 12 "And what have you learned? It's been 13 wiped clean because they had too much data 14 storage." 15 Wrong, according to Morrison Brown Sosnovitch. 16 They don't destroy data in that way. 17 Secondly, again drawing on the collective 18 experience in the room, to think about a law firm 19 environment, is that why you destroy data, because you run 20 out of space? 21 22 (BRIEF PAUSE) 23 24 MR. DAVID BUTT: Mr. Lyons does go on to say: 25 "There was somebody in my office who looked

1 after all of that, Mr. Mangat." 2 3 (BRIEF PAUSE) 4 5 MR. DAVID BUTT: And the timing which covers 6 much of page 116 and 117 is discussed in some detail in a 7 question of whether its before the Inquiry had started or 8 during and at that point, it's helpful to once again, turn 9 back to Tab 14. 10 11 (BRIEF PAUSE) 12 13 MR. DAVID BUTT: And look at the letter from 14 Morrison Brown Sosnovitch, the third paragraph, in which the 15 following is said: 16 "Our office administrator advises that we 17 did send two (2) boxes of Mr. Lyons 18 personal files to Mr. Lyons at his request, 19 sometime in the calendar year of 2002." 20 So, what we have here, if this letter can be 21 relied on, is evidence that in 2002, keep in mind that the 22 Inquiry was called in February of 2002, in 2002, and in 23 fairness we don't know when, it could have been before 24 February, we have Mr. Lyons, if this letter is accurate 25 demonstrating that he knows, there is material in storage at

1 Morrison Brown Sosnovitch, because he through an agent, went 2 and got it. 3 And again if we juxtapose that level of 4 knowledge, he knows his files were opened under the MBS name, 5 he knows that they were generated on MBS computers that he 6 left behind. 7 He didn't take the Dell Financial Services 8 file with him, he knows that there is material in storage and 9 Morrison Brown Sosnovitch says, he never asked. 10 In my submission, a picture is starting to 11 emerge. The cross examination continues and the next 12 relevant point that I would like to bring to your attention, 13 Madam Commissioner, is at page 93, the handwritten pages in 14 Tab 45. 15 16 (BRIEF PAUSE) 17 18 MR. DAVID BUTT: And what precedes this 19 passage, just to contextualize it for you, Madam 20 Commissioner, is discuss about lawyers retention obligations 21 and the point that these are lobbying files, so there may be 22 some fair difference of approach to those two (2). 23 But, then the cross examination turns to a 24 different subject. At the bottom right of the four (4) pages 25 on the hand numbered 93, we have at line 15, Ms. Rothstein's

1 still asserting: 2 "You also have a duty as a taxpayer if 3 nothing else to maintain financial records. 4 A: Well, we do keep the financial records. 5 Q: Oh, so there are records now, they're 6 not all destroyed? Who would have those, 7 your accountant? 8 A: No. Morrison, Brown, Sosnovitch." 9 So, again, in the witness box, during his 10 testimony May 8th through the 14th, he knows, but again, it 11 appears from Morrison, Brown, Sosnovitch, he did not inquire. 12 Over the page: 13 "So, Morrison, Brown would have the 14 financial records with respect to Dell and 15 DFS? 16 A: I would imagine so. I would assume so, 17 so, I don't know if they have them still." 18 Lines 8 and 9. Again, not only do we have the 19 same juxtaposition between Morrison, Brown, Sosnovitch's 20 assertion that he never inquired, but we have an internal 21 inconsistency in Mr. Lyons' own evidence. A few pages back 22 he said: 23 "No, no, I had Mr. Mangat inquire, it's all 24 been destroyed." 25 And now, well, maybe it hasn't been destroyed,

1 I don't know. 2 Then we get to the issue of offsite storage. 3 And page 126 of the transcript, which is at page 94, lines 17 4 and 18: 5 "I'm saying, Mr. Lyons --" 6 Again Mr. (sic) Rothstein: 7 "-- that surely developed a practice as a 8 lawyer over all the years that you 9 practised, of sending closed files to 10 offsite storage? 11 A: Yes, when I was a lawyer, but I don't 12 practice law." 13 And there's a little bit of an exchange and 14 some objections, and when -- when ultimately we return to the 15 question, like at the bottom of transcript page 128 onto 129: 16 "Q: I'm simply saying, Mr. Lyons, that it 17 can't be that it was too expensive to send 18 the files to offsite storage? 19 A: I'm going to suggest to you without 20 sarcasm, that it is too expensive, and 21 that's my answer." 22 What does that answer mean? One (1) fair 23 implication of that answer is that I don't use offsite 24 storage, because it's too expensive. 25 But what do we know from the Morrison, Brown,

1 Sosnovitch letters? We know that in 2002 he went through an 2 agent to the offsite storage, and retrieved two (2) boxes of 3 files. 4 MADAM COMMISSIONER: When you say he went 5 through an agent, did you mean somebody at -- at Morrison, 6 Brown, Sosnovitch? 7 MR. DAVID BUTT: Well, I -- I don't know, I'm 8 -- I'm leaving open that possibility because the -- the 9 wording of the letter at Tab 14 is that as follows: 10 "Our office administrator advises that we 11 did send two (2) boxes of Mr. Lyons' 12 personal files to Mr. Lyons at his 13 request." 14 So, I do not assume that Mr. Lyons went 15 himself to the storage facility and removed the boxes, I'm -- 16 I'm saying that a fair reading of that is that it was done 17 for him at his request. 18 MADAM COMMISSIONER: Okay. 19 MR. DAVID BUTT: And frankly, I -- I don't 20 know. 21 So, and that concludes my march through both 22 the -- the transcript and the correspondence. And I'd like 23 to pause at -- at this stage to just say that in my 24 submission, a picture fairly emerges if the correspondence 25 for Morrison, Brown, Sosnovitch is -- is an accurate

1 assertion of -- of what went on. 2 And there are some very serious issues, not 3 issues that I would ask you, Madam Commissioner, to make any 4 final determination on at this stage, because it's simply 5 correspondence. 6 But at this stage it would be fair, in my 7 submission, for a dispassionate third party looking at this 8 material, to have some very serious concerns about the level 9 of Mr. Lyons' cooperation with this Inquiry. 10 And it's in that context, that we have the 11 boxes before us, and it's to the opening of those boxes that 12 I will now turn. 13 Let me begin by saying there are nineteen (19) 14 boxes in our possession, right now. 15 Let me also say, that the first letter 16 identifying the boxes that I've already taken the Court 17 through, speaks of twenty one (21). I have to confess I 18 scratched my head a little bit, and worried a bit about the 19 twenty one (21) to nineteen (19). 20 It appears that the answer lies in the 21 correspondence I've just referred to, that in 2002, two (2) 22 boxes were taken by Mr. Lyons. That would bring us from 23 twenty one (21) down to nineteen (19). 24 So what we are seeking is an Order that those 25 boxes be unsealed confidentially, away from the public eye by

1 Commission Counsel, in the presence, if they wish of Counsel 2 for Mr. Lyons or Mr. Lyons himself and that they be reviewed 3 first for relevance and only if there is relevant material -- 4 MADAM COMMISSIONER: I take it you're meaning 5 for helpfulness. 6 MR. DAVID BUTT: Helpfulness, I'm sorry. 7 Only if they contain potentially helpful material, that that 8 potentially helpful material alone, be examined for potential 9 privilege issues. 10 Is that the right thing to do? Is that the 11 fair thing to do at this stage? We're hearing a Motion 12 because we cannot agree that it is and if I might, Madam 13 Commissioner, I'd like to spend a couple of minutes, talking 14 about why, in my submission, that is the right thing to do 15 and the fair thing to do. 16 I just want to start with a -- before I -- and 17 in making the submissions I'll be looking at the case law, 18 but, before I do that, I just want to make a couple of common 19 sense observations. 20 One (1) the clock is ticking and it's been 21 ticking for months. A summons has been outstanding since 22 August of 2002, fourteen (14) months ago. The boxes have 23 been in our possession and there's a date stamped letter in 24 the materials since July 22nd. 25 We began corresponding with Mr. Lyons Counsel

1 on August 6th. The boxes are still sealed. So, on any 2 objective view of things, it's my submission, Madam 3 Commissioner, that it's time to do something. 4 It's time to do something fair, but, it's time 5 to do something decisive, it's time to act. Why then do I 6 say, that this is a fair way of proceeding? 7 Understanding why it's fundamentally fair 8 requires understanding the role of Commission Counsel. 9 Everybody is abundantly aware that privilege issue lurk in 10 the very near background to this Motion. 11 Nobody wants a privilege thoughtlessly tossed 12 open, least of all, Commission Counsel. The Public Inquiries 13 Act is perfectly clear that we have no power to admit into 14 evidence privileged material, Section 11. 15 Therefore, for many reasons, not the least of 16 which, is the prohibition in Section 11, it's incumbent on us 17 to assess privilege issues, if there are any, in advance. 18 Conceptually, it only makes sense to turn our 19 minds to privilege issues only with respect to the sub-set of 20 relevant or potentially helpful materials and that's what 21 we're proposing to do. 22 So what we're proposing to do, before I turn 23 to the authorities, get things moving because of the time 24 issue, we've been dealing with, gets things moving in a 25 conceptually sensible way, relevance first, then privilege

1 and gets things moving in a confidential way, so that the 2 process of determining what's relevant, does not in any way 3 compromise privilege issues. 4 But why should we lawyers get to look at this 5 stuff? And that's why, in my submission, one has to 6 understand the role of Commission Counsel, and -- and perhaps 7 the best discussion that's helpful, comes from Tab 3 of my 8 materials, which is Justice O'Connor's paper to the Advocate 9 Society on the role of Commission Counsel. 10 And I accept, without question, that third 11 parties looking at potentially privileged material causes 12 very serious privilege problems; are we a third party in that 13 sense? The simple answer is, no and that's why we can and we 14 should. 15 Why are we not a third party? In my 16 submission, Justice O'Connor appropriately captures the 17 conceptual -- critical conceptual distinction between 18 Commission Counsel and counsel for a third party. 19 And looking at his paper, which is at Tab 3, 20 he states under the title: 21 "Role of Commission Counsel is quite 22 different from that of a lawyer in most 23 other legal proceedings." 24 What's different about it we're going to see, 25 is that Commission Counsel functions, in some respects like a

1 lawyer, in the presentation of evidence, in the interviewing 2 of witnesses, in the making of legal submissions like is 3 happening right now, but in other respects, like a Judge. 4 First of all, Commission Counsel is as Justice 5 O'Connor says, the alter ego, or the agent of the Judge. We 6 have the same confidentiality obligations that you, Madam 7 Commissioner, have. 8 Secondly, and Justice O'Connor notes this in 9 his paper, we have a duty to provide advice to the 10 Commissioner. It's unheard of that independent counsel for 11 third parties would give a Judge legal advice. A Judge would 12 hear their submissions of course. 13 But the fact that it is part of our role to 14 give legal advice, demonstrates the closeness of the 15 connection between you, Madam Commissioner, and Commission 16 Counsel. 17 Secondly, Justice O'Connor notes a number of 18 roles of Commission Counsel, but in the last page of his 19 paper, the second one (1) that I wish to draw attention to is 20 that one (1) of our roles is to help write the report. 21 Again, we are plunged up to the eyebrows and beyond, in the 22 judicial role. 23 And thirdly, again identified by Justice 24 O'Connor in the last page of his article, we speak for the 25 Commission, principally to the media, because as Justice

1 O'Connor notes, it is a very bad idea for the Commissioner, 2 who's generally Judge, to do so. 3 So, in a very real sense, Commission Counsel 4 wears the public face of a judicial inquiry, and if it's 5 going to be what its name suggests it has to be, that public 6 face is a judicial one (1). 7 So, we can see that privately, publicly, 8 conceptually and functionally, we are the Commissioner. 9 Understanding that, puts the order then in the proper 10 context. Is it appropriate for you, Commissioner Bellamy, to 11 review this material for relevance? Absolutely. 12 Therefore, is it appropriate for Commission 13 Counsel to review it confidentially, for helpfulness? 14 Absolutely. 15 Lastly, this of course is not a procedure that 16 we thought up on the spot, it's a procedure that has been 17 resorted to quite successfully before in the situation where 18 it's hard to imagine more sensitive documents. That is the 19 Walkerton Inquiry and the search warrant executed, to seize 20 Cabinet documents. 21 Again, difficult to imagine a more sensitive 22 area of privilege in the law than Cabinet privilege. And the 23 excerpts that I have from the Walkerton report demonstrated 24 that the parties reached an agreement in Walkerton to deal 25 with the privilege issues, precisely as we are proposing.

1 Confidential review and inspection by 2 Commission Counsel with the affected parties and again, 3 conceptually, logically, helpfulness comes first. After 4 helpfulness, privilege issues were addressed. 5 And as the report at page 487, Tab 2 in my 6 Authorities mentions, both parties would have the opportunity 7 to resolve the privilege issue on a document by document 8 basis. 9 It makes perfect sense. We can sit down 10 together confidentially and talk about the document with the 11 document in front of us and if we cannot reach an agreement, 12 as was the case in Walkerton, a Hearing would be held before 13 a Judge, precisely what we propose. 14 As it happened in Walkerton, no one had to go 15 to the independent Judge, which was the Regional Senior 16 Justice, because they were able to agree. 17 You, Madam Commissioner, are aware that we 18 have followed this procedure in a number of instances in 19 these proceedings. And the absence of any application 20 demonstrates that so far we have been able to agree among 21 Counsel on the treatment of helpful material that may have 22 privilege issues around it. 23 So, the nub of my submission on why this is an 24 appropriate thing to do rests on the role of Commission 25 Counsel and the demonstrated appropriateness of the procedure

1 we propose, in the context of the Walkerton Inquiry. 2 There's just one (1) last case that I wish to 3 address in -- it's in My Friend, Mr. Auger's material and 4 that's the Supreme Court of Canada's case, about law office 5 searches. 6 And it's a criminal case, it's a criminal code 7 search warrant and the Supreme Court of Canada found the 8 legislation constitutionally defective and I'd just like to 9 talk about that for one (1) minute. 10 11 (BRIEF PAUSE) 12 13 MR. DAVID BUTT: First of all, we have to all 14 keep at the forefront of our minds, the repeated admonitions 15 of the Supreme Court of Canada that a Public Inquiry is not a 16 criminal prosecution, Commission Counsel are not prosecutors. 17 And that has been so frequently repeated, it's 18 in the Consortium case that's before us all now, that if we 19 were so minded, without much more we could say, well thanks 20 the Heintz case in the Supreme Court of Canada, criminal 21 context, really isn't very helpful and we could say that 22 respectably, but, I don't want to simply because it arises in 23 an inapplicable context through out the good ideas that there 24 might be in the case. 25 So it's worth looking for a brief minute at

1 what the Supreme Court of Canada said, to see if there's some 2 helpful ideas that we can transplant into this very different 3 legal context. 4 And to deal with this case, I don't need to go 5 to more than the head note, Mr. Auger's principal edited the 6 particular version that's before you, so I'm sure it's 7 completely accurate and reliable. 8 And there are two (2) things -- 9 MADAM COMMISSIONER: I see, you mean in the 10 Canadian Criminal cases, okay. 11 MR. DAVID BUTT: That's right. 12 MADAM COMMISSIONER: I couldn't figure out 13 what you were talking about. Yes. All right. 14 MR. DAVID BUTT: I've never found it necessary 15 to double check the text with the head note in the CCD's. 16 MADAM COMMISSIONER: I thought you had meant 17 he had edited what was before me here right now. All right. 18 MR. DAVID BUTT: No. 19 MADAM COMMISSIONER: Yes. 20 MR. DAVID BUTT: His very able editorial team. 21 They -- they said two (2) things, there are two (2) problems 22 with the Criminal Code legislation as it stood at the time. 23 One (1), is that there was a very short time turnaround, 24 thirty-five (35) days after which the Crown could get access 25 to sealed material. The Supreme Court of Canada said, that's

1 too short, you can't have that kind of arbitrary deadline 2 imposed. 3 So, let's look at our context, we're nothing 4 like that. This Summons has been outstanding since August 5 2002, we've been corresponding with Morrison, Brown, 6 Sosnovitch since March, to try to obtain this material, 7 always from the very first letter, which -- which I took the 8 Court to this morning, always insisting that we would be 9 happy to receive it sealed. 10 And we have been corresponding directly with 11 Mr. Lyons' counsel since August 6th, again, always 12 maintaining that it would remain sealed until appropriately 13 dealt with. 14 So, in -- in -- if we take this case as a 15 benchmark of fairness, globally construed, we're well above 16 that benchmark on the timing issue. In fact, the timing 17 issue is starting to go the other way. We have to get on, we 18 have to make decisions. We can't delay these Proceedings any 19 longer, at the expense to everyone that is entailed in delay. 20 Secondly, the case says that 488.1, which is 21 the Criminal Code section on law office searches, permitted 22 the Crown under certain circumstances, to inspect the 23 documents before a judicial determination of privilege was 24 made. 25 And again, that's simply not the case here.

1 The Crown is in an adversarial relationship vis-a-vis an 2 accused person. We have absolutely no intention of 3 permitting any independent third party, to look at these 4 documents before the privilege issues are resolved, if 5 necessary, by hearing before the Regional Senior Justice and 6 on up the Judicial Review ladder, if that's where the 7 Proceedings go. 8 To suggest that Commission Counsel looking at 9 it is no different than Crown Counsel looking at it, I think 10 everybody can see quite clearly where I'm going with this, is 11 to completely overlook the fundamental conceptual distinction 12 that is so succinctly put between Commission Counsel and an 13 adversarial third party, in Justice O'Connor's article. 14 So, if we look -- even looking in the criminal 15 context, for lessons to be learned in fairness, it's my 16 submission that we're there. 17 The order that we're requesting is found in -- 18 in substance, in a letter from Commission Counsel, to Mr. 19 Lyons' counsel, at Tab 34 of the materials. 20 And I've highlighted the salient features of 21 the order, but just to allow other parties to address what 22 we're requesting, I refer everybody to the seven (7) points 23 in that letter, which would constitute, in my submission, an 24 appropriate and fair wording of the order, but I would like 25 to note just a couple of minor modifications.

1 Point number two (2), suggests that the review 2 to be conducted confidentially on Inquiry premises for 3 relevance first and then to address privilege issues would 4 begin within one (1) business day of the date of the Order. 5 I would submit, Madam Commissioner, that it 6 would be appropriate in the event that parties wish to seek 7 further review that that be expanded. It doesn't take long 8 to serve a notice and file a notice of application to review 9 any decision you, Madam Commissioner, might make but one (1) 10 day is a little short; perhaps two (2) or three (3) and the 11 other parties before you may have submissions on that issue. 12 Secondly, item number 7, 13 "Materials affected by unresolved privilege 14 or relevance claims will be placed before 15 the Commissioner for her review and 16 decision on the claim." 17 Again, consistent with the Walkerton model 18 you, Madam Commissioner, are best placed to determine 19 relevance. So I would propose that you, Madam Commissioner, 20 deal with relevance issues first because if it's irrelevant 21 privilege issues need not be addressed and that privilege 22 issues be addressed by the Regional Senior Justice. 23 And I understand, from conversations this 24 morning, that the Regional Senior Justice has, once again, 25 agreed to make himself available for that confidential review

1 if necessary. 2 Lastly, I would point out that in the 3 Walkerton procedure, which is essentially what I am 4 proposing, Madam Commissioner, be followed in this case, the 5 parties agreed that an application to the Regional Senior 6 Justice be deemed an application pursuant to Rule, I believe 7 it's, 14.01 in the Rules of Civil Procedure. 8 The effect of that is to accord, to my 9 understanding, a settled avenue of further review. If that 10 process were employed it would have the salutary effect of 11 not distracting anybody and not obliging anybody to waste 12 time or money, and in our case taxpayers' money, on bickering 13 over jurisdiction. So it would be my strong submission that 14 that be the appropriate procedure. 15 Lastly, on the nature of the order, I need to 16 address the titles on the boxes. It appears by the titles 17 that some, if the titles are accurate, boxes may contain 18 material that predates the period of concern with this 19 Inquiry. Either inquiry, that is TCLI or TECI and, of 20 course, the review must, in my submission, encompass issues 21 in both so that we only have to do this once for both 22 Inquiries. 23 If those titles are accurate then it may be 24 that some of the boxes contain irrelevant material. Two (2) 25 difficulties, one is that we have no idea what those titles

1 are, who put them -- I mean, what they are, but who put them 2 on and what knowledge the person titling the boxes had about 3 the contents of the files. 4 We know, because it's in the correspondence, 5 that Morrison Brown Sosnovitch did conduct what they called a 6 cursory review of the material and reached a preliminary 7 determination that some of those materials were irrelevant, 8 but, in the same letter said, we have neither the time, the 9 inclination or the resources to look at every page. 10 So, again, we do not have anything conclusive, 11 but, we do have some indication that there may be irrelevant 12 material in the boxes. 13 In that situation, in my submission, we have 14 to look at all of these boxes to see with some degree of 15 finality, what's in them, whether they are labelled 16 appropriately or inappropriately, how they're organized and 17 put the matter to rest, once and for all. 18 In making that submission, I also ask you 19 Madam Commissioner to keep in mind, that and I've already 20 taken everybody through this transcript reference, Mr. Lyons, 21 and I'll give you just the reference again, so that everyone 22 can turn back to it, did imply, at least, but one could 23 fairly say he implied that lobbying files were not stored off 24 site. 25 Looking at all of those files, may give us

1 some insight in the extent to which, Mr. Lyons was making an 2 accurate statement, when he said that because to take but one 3 (1) example, there's one (1) box going back to 1993, if Mr. 4 Lyons, was engaged in lobbying activities, with respect to 5 that box in 1993, then the fact that it was stored offsite, 6 has potentially great significant to his assertion under 7 oath, that he does not store lobbying files, off site. 8 So while, facially, the dates might seem to 9 make this material irrelevant, in light of what Mr. Lyons 10 himself has said, it is appropriate in my submission, for 11 Commission Counsel to inspect those files as well, because it 12 may be that as a result of that inspection, Mr. Lyons has a 13 statement under oath to answer for. 14 Those are my submissions. Thank you, Madam 15 Commissioner. 16 MADAM COMMISSIONER: Okay. How do you propose 17 that we proceed with this? I -- there is someone here from 18 the City and someone here from Dell Computer. 19 So, I don't know Mr. Auger, if you'd like me 20 to hear you first, or if you'd rather hear them first, to see 21 what it is that they have to say, so that you can reply to 22 all of that. 23 MR. RICHARD AUGER: Thank you very much. I 24 was thinking about that and I know, My Friend Mr. Roland, and 25 I don't want to speak for him, he can speak for himself, but,

1 my impression is that he may support Mr. Butt's position and 2 that -- 3 MADAM COMMISSIONER: Ms. Dyer? 4 MR. RICHARD AUGER: -- Counsel here, Ms. Dyer, 5 may in whole or in part, support the position I'm advancing. 6 So I don't -- I'm really in your hands. One (1) thought I 7 had, was whether or not, Mr. Roland wanted to now proceed 8 with his submissions, and then I would go next and 9 characterize that as responding to Mr. Butt's Motion. 10 MADAM COMMISSIONER: Okay. I guess from my 11 perspective, I see this as an application by Commission 12 Counsel that applies directly to your client, Mr. Lyons. 13 And insofar as the City is concerned and Dell 14 Computer is concerned, I see their submissions as potentially 15 being helpful to assist me, but, not necessarily 16 determinative of what I'm going to do. 17 Whatever ruling I make will be -- will affect 18 Mr. Lyons only and not Dell Computer or the City, at least 19 that's how I'm seeing it at this point. 20 MS. VALERIE DYER: I would have to disagree -- 21 MADAM COMMISSIONER: I'm sorry, your 22 microphone doesn't seem to be -- okay, go on. 23 MS. VALERIE DYER: The -- the privilege, if it 24 exists. 25 MADAM COMMISSIONER: We're not talking

1 privilege. 2 MS. VALERIE DYER: No, no, they -- well, we 3 are -- well, the difference here is we're talking about 4 whether somebody can look at somebody else's privileged 5 documents. 6 Privilege in here is in the communication and 7 is a privilege -- 8 MADAM COMMISSIONER: Okay, you know what, I 9 don't actually want to hear a whole argument on this right 10 now, because we've been here for an hour and a half, and 11 personally, I need a break. I -- I just want to -- to get a 12 sense of who's going next, and why, I guess. 13 But -- but I -- my -- my preliminary view was 14 that what I'm doing here today is making a decision based on 15 what Commission Counsel is asking me to do, vis-a-vis Mr. 16 Lyons, and that is simply looking at whether or not I will 17 allow them to unseal those boxes, to take a look at whether 18 there's anything in there that is helpful to me in my 19 capacity as Commissioner of a Public and Judicial Inquiry; 20 that's how I see this application today. 21 And so I -- I'm just not sure what -- what it 22 is that I'm to do with submissions from the City or -- or 23 Dell Computer. Although I'm happy to hear your parties, and 24 I'm happy to hear what you have to say, it's just I'm -- I 25 see at this point, and maybe I'm wrong, as being primarily an

1 issue between Commission Counsel and Mr. Lyons on this 2 particular case. 3 But why don't we take a break and -- and then 4 Mr. Roland, would you be prepared to go after the break then? 5 MR. IAN ROLAND: I will, Madam Commissioner. 6 MADAM COMMISSIONER: All right, we'll break 7 until ten (10) to. 8 THE REGISTRAR: The hearing is in recess until 9 10:50 a.m. 10 11 --- Upon recessing at 10:30 a.m. 12 --- Upon resuming at 10:50 a.m. 13 14 THE REGISTRAR: The Hearing is now resumed, 15 please be seated. 16 17 (BRIEF PAUSE) 18 19 MADAM COMMISSIONER: Yes, Mr. Roland...? 20 MR. IAN ROLAND: Yes, Madam Commissioner, on 21 behalf of the City of Toronto, we support Mr. Butt's 22 application to you, and we recommend the process that he puts 23 before you, to essentially vet the documents that are 24 contained in the eighteen (18) or nineteen (19) boxes. 25 Let me say that this is not a novel issue,

1 that the City of Toronto as I understand, has gone through 2 the same process with respect to many documents that for 3 which there was a concern both of relevancy and in 4 particular, privilege. 5 And finds -- found this -- the process 6 entirely to its satisfaction, and had -- and retains full 7 confidence in Commission Counsel to act as your alter ego in 8 the vetting of the material that is contained in those boxes, 9 as Commission Counsel has vetted material that has raised 10 issues for the City of Toronto. 11 What he puts before you is a process that he 12 recommends as fair, and we support the process as being a 13 fair one (1). 14 I want to also say that on the submissions put 15 before you by Mr. Butt this morning, and on the material 16 that's in place before you by him, it is clear that Mr. Lyons 17 has forfeited his opportunity to initially vet the documents. 18 As I understand it, his counsel will be 19 proposing to you that the boxes be returned to the Greenspan 20 White, and that Mr. Lyons, presumably with this counsel, will 21 go through the documents and identify those that are 22 relevant, and identify those that if relevant, there is an 23 assertion of privilege. 24 We say he's forfeited that opportunity. And 25 the reason he's forfeited that opportunity is clear from the

1 material that's put before you. That is he has not been 2 candid with you in his evidence. He has not presented 3 himself as someone who's prepared to fairly and openly and 4 appropriately cooperate with this Inquiry, by his denial of 5 the existence of the -- of any relevant and non-privileged 6 document and file, that is the DFS file. 7 What I -- what we also say to you, Madam 8 Commissioner, is that it would be difficult in any event, in 9 the circumstances, for Mr. Lyons, given his cast of mind and 10 his approach to date, to determine possible relevance. 11 This is a detailed and complex Inquiry, and it 12 is more difficult in this than in most cases, to assess what 13 is or is not relevant. There are, no doubt, going to be 14 documents in those boxes that are not relevant from any 15 perspective and there are -- there may be documents that are 16 relevant from any perspective. 17 Between those two (2) extremes there may very 18 well, or likely be a number of documents in which there is 19 going to be debate about relevance. That debate can't be 20 left solely now to Mr. Lyons, in the circumstance, to 21 determine. 22 23 (BRIEF PAUSE) 24 25 MR. IAN ROLAND: And I say that, not only

1 because of the complexity of this case, but also Mr. Lyons 2 and his counsel have not been in attendance and participated 3 at all in this Inquiry and hence, aren't sufficiently 4 informed of the nuances of relevance. 5 However, most significantly, the boxes came 6 from a third party, not from Mr. Lyons. They're in the 7 possession of Commission Counsel, who in my submissions, has 8 a duty, an overriding duty, to assure that a proper review of 9 the contents of the file boxes is undertaken, to determine 10 whether or not there are relevant documents. 11 You've averted, Madam Commissioner, this 12 morning, to the -- to a descriptor of helpful, as opposed to 13 relevant. I'm not sure whether you -- you make a distinction 14 between the two (2). I don't make a distinction between the 15 two (2). Certainly I don't say that, and I don't come before 16 you saying that helpful is broader than relevance. 17 It may be that one might say that helpful is 18 narrower than relevance, it may be relevant, but not 19 particularly helpful to the Inquiry, and if -- if that's the 20 intent of the use of the term helpful, I leave it to 21 Commission Counsel to determine whether a document, although 22 relevant, may not be helpful to the work of this Inquiry. 23 We're not interested in having documents put 24 before the Inquiry, if they're -- even if relevant, if 25 they're not helpful at all to the work of the Inquiry.

1 Madam Commissioner, you're assisted by analogy 2 in this case, with the rules of civil procedure. They don't 3 govern your process, but the rules of civil procedure have 4 been developed over -- over many decades, to regulate the 5 civil process, including the disclosure and production of 6 relevant documents and you're helped by the rules of civil 7 procedure, and in particular by Rule 30.10. Sorry, yes, Rule 8 30.10. 9 Rule 30.10 deals with the production from non- 10 parties of documents, with leave, and what you have here is 11 documents from a non-party, from the Morrison Brown firm. 12 And what the rule says is that under sub 3: 13 "Where privilege is claimed for a document, 14 or where the Court is uncertain of the 15 relevance of or necessity for discovery of 16 the document, the Court may inspect the 17 document to determine the issue." 18 That it is for the Court to look at the 19 document if there's an issue of relevance, or an issue of 20 privilege to inspect the document and to determine whether 21 it's relevant or whether it's privileged. 22 You have that same concern here at this 23 Inquiry with this motion and I support the submissions made 24 by Mr. Butt that Commission Counsel is the Court in this 25 process, is your alter-ego and that has been recognized by

1 numerous Commissions in the past, by the writers and in 2 particular, by Mr. Justice O'Connor in the article put before 3 you this morning. 4 I point you to a couple of additional passages 5 that Mr. Butt didn't refer to in that article, in particular, 6 at page 10 on the right hand column in which he makes it 7 clear, about two-thirds (2/3) of the way down the right-hand 8 column on page 10, that the proceeding is entirely invesgator 9 -- investigatory and not adversarial. 10 And that, of course, is the critical 11 distinction in this process that it is investigatory and that 12 Mr. Butt and Commission Counsel, generally, are your alter 13 ego in conducting the investigation. This is not a cause, as 14 the motion is struck -- put before you that any adversary, 15 any third party, even if one could call interested parties in 16 this process adversaries and certainly from -- it could be 17 said that's so from a number of perspectives. 18 None of them are in -- are proposed to be 19 engaged in the process of reviewing these documents, vetting 20 the documents and so the analogy is to rule 30.10 is perfect. 21 That is there's an issue of relevance, there's an issue of 22 privilege and the court, in the context of this Inquiry and 23 the person of Commission Counsel is and should be fixed with 24 the responsibility of inspecting the document. 25 From the City's perspective, we say this is im

1 -- it's important that this Inquiry be seen as a fair Inquiry 2 and a fair process and given the conduct of Mr. Lyons to 3 date, even if he had, as he did, the opportunity himself 4 initially to vet the documents, he's both, in a practical 5 sense, lost the opportunity because the documents are now 6 with the Inquiry and in a very real fairness sense, has 7 forfeited the opportunity by his evidence and by his approach 8 to this very issue to date. 9 In denying the existence of the documents and 10 in failing to look for the documents even though it's 11 apparent he knew they existed and indeed, coming before you 12 and say he had, when he hadn't. That is there can be no fair 13 confidence in Mr. Lyons himself unilaterally vetting these 14 documents in the circumstances. 15 So we ask you then and we support and we ask 16 you to allow the motion brought on behalf of Commission 17 Counsel. Thank you. 18 MADAM COMMISSIONER: Thank you, Mr. Roland. 19 MR. DAVID BUTT: Madam Commissioner? 20 MADAM COMMISSIONER: Yes? 21 MR. DAVID BUTT: I wonder if I might just 22 before anyone else speaks bring to your attention one small 23 factual issue that I thank Ms. Dyer for alerting me to. 24 There are only eighteen (18) boxes on that list. 25 MADAM COMMISSIONER: Okay.

1 MR. DAVID BUTT: I spoke of nineteen (19) -- 2 MADAM COMMISSIONER: Yes. 3 MR. DAVID BUTT: -- and twenty-one (21) as 4 mentioned in the correspondence. I misspoke. We counted 5 during the break, we have only eighteen (18). I'm confident 6 that we have retained in one location since we received them 7 on July 22nd, all of the boxes we received but beyond that, I 8 do not have an explanation by the number twenty-one (21) 9 appears in the correspondence from Morrison Brown Sosnovitch 10 and if we assume that the two (2) boxes taken away account 11 for two (2) of them why there is a third one unaccounted for. 12 I do not have anything more to offer on that 13 at this stage, but I can say that I will make sure we 14 communicate with Morrison Brown Sosnovitch to try to resolve 15 that issue and we'll keep everybody apprised of our 16 communication about that and I bring that to everyone's 17 attention now so that anyone can deal with it in the 18 submissions that they make. Thank you. 19 MADAM COMMISSIONER: All right. Thank you. 20 Mr. Auger...? 21 MR. RICHARD AUGER: Thank you, very much and I 22 thank Mr. Butt for clarifying that one (1) point and I've 23 prepared -- 24 MADAM COMMISSIONER: Oh, okay. 25 MR. RICHARD AUGER: -- my own compendium of

1 correspondence and I received Mr. Butt's compendium this 2 morning and to try to be as efficient as possible, what I 3 propose to do is deliver to you my own compendium because I 4 have my own notes and references within my own volume. 5 MADAM COMMISSIONER: Sure. That's fine. 6 thank you. 7 MR. RICHARD AUGER: And I have a copy for My 8 Friends and the one, sort of, housekeeping item I'll point 9 out, mostly for Mr. Butt's benefit, is that Tab 6, I've taken 10 out of my copy because that's one of the letters that Mr. 11 Butt and I agreed would be edited. 12 MADAM COMMISSIONER: Okay. 13 MR. RICHARD AUGER: And I'm only doing this to 14 try to avoid matching up my own notes on my own compendium 15 and -- 16 MADAM COMMISSIONER: Welcome to the modern 17 age, Mr. Auger. With the system that we have here, one has 18 to stay close to the microphone otherwise the court reporter 19 doesn't pick up your voice. So, would you like to go to the 20 podium then and that might make things a little easier. 21 So I have here your compendium of 22 correspondence and your brief of authorities. 23 MR. RICHARD AUGER: Thank you, very much. 24 25 (BRIEF PAUSE)

1 2 MR. RICHARD AUGER: And another reason that 3 I'm opting to proceed in this manner, Madam Commissioner, is 4 that my approach is really entirely different from 5 Mr. Butt's. Mr. Butt spent a lot of time on reviewing the 6 various letters to Morrison Brown and, indeed, reviewing Mr. 7 Lyons' evidence and I think that got to Mr. Butt's submission 8 that, and indeed Mr. Roland's submission, was that Mr. Lyons 9 had forfeited his entitlement to review these documents 10 privately with his own counsel. 11 In my submission, the attempted 12 characterizations by My Friends are both unfair and entirely 13 unhelpful to the issue that you're being asked to assist on 14 today and I think one thing we can all agree on is that when 15 you go through the correspondence as Mr. Butt accurately has 16 and you go through the evidence, I think we can all agree on 17 the fact that it's not really clear what happened. 18 And, indeed, Mr. Butt conceded that there was 19 a letter of April 9th. And, again, as Mr. Butt pointed out, 20 the timing is important as we know Mr. Lyons testified in 21 early to mid-May. But the problem, as we now know, is that 22 according to the Morrison Brown correspondence, which is at 23 Tab 4 of Mr. Butt's compendium page 16, there's a letter of 24 April 9th, 2003 sent by fax and the fax number that I can 25 read on my copy is 416-338-3944 and it's addressed to Mr.

1 Manes, Commission Counsel. 2 MADAM COMMISSIONER: I -- I can't actually see 3 that on mine, I can't see the numbers. Is it on yours? 4 MR. RICHARD AUGER: On my document, Madam 5 Commissioner, on page 16 I'm reading on the top left, April 6 9, 2003, file 200 -- 7 MADAM COMMISSIONER: Oh, yes, okay sorry, yes. 8 But that's not the fax -- I see, I thought you meant the 9 transmission -- 10 MR. RICHARD AUGER: Oh, no, I -- 11 MADAM COMMISSIONER: Okay. 12 MR. RICHARD AUGER: -- I don't see a 13 transmission on my document. 14 MADAM COMMISSIONER: Right, okay, thank you. 15 MR. RICHARD AUGER: So -- so, what I'm 16 pointing out is that the letter of April 9th, 2003 was faxed 17 to fax number 416-338-3944, so on the face of the documents 18 that we have, it would appear that a letter was sent from 19 Morrison Brown to Mr. Manes on April 9th. 20 MADAM COMMISSIONER: There isn't one (1) that 21 has a fax transmission on it though, what -- Morrison Brown 22 Sosnovitch sent to Mr. Manes was a -- a copy of it, but not 23 one (1) where the fax transmission has gone through? 24 MR. RICHARD AUGER: Well, the document -- I'm 25 sorry.

1 MADAM COMMISSIONER: Is that right? 2 MR. RICHARD AUGER: The document that I'm 3 referring you to -- 4 MADAM COMMISSIONER: Yeah, I -- I see what 5 you're saying -- I know what you're saying is that on the 6 face of the letter from Mr. Sosnovitch, that he then -- he 7 sends to Mr. Manes, this says: 8 "Further to your letter of April 8th, we 9 enclose herewith an index of materials." 10 And it -- this letter is dated April the 9th, 11 2003. 12 MR. RICHARD AUGER: Correct. 13 MADAM COMMISSIONER: It appears then in -- on 14 the next tab on May the 15th, that there -- there appears to 15 have been some kind of -- of discussion between Mr. Manes 16 then and Mr. Sosnovitch, because he says: 17 "As I explained, this letter was not in our 18 file." 19 So, I'm taking from that, that there must have 20 been some conversation. 21 MR. RICHARD AUGER: Right. 22 MADAM COMMISSIONER: Right, okay. 23 MR. RICHARD AUGER: And so document 15, in the 24 tab that I was looking at, Madam Commissioner, in Tab 4, 25 indicates that on Monday, May 12th, 2003, Morrison Brent --

1 Morrison Brown, sorry, sent another fax and the comments are: 2 "Re fax of letter initially faxed April 3 9th." 4 MADAM COMMISSIONER: Right. 5 MR. RICHARD AUGER: So, that's what we have 6 and that's what we know today. 7 8 (BRIEF PAUSE) 9 10 MR. RICHARD AUGER: And without trying to 11 assert on behalf of Mr. Manes, what his position is and 12 trying to suggest whether or not he received it, et cetera, I 13 think we can all agree that -- well, I think Mr. Butt 14 indicated that through clerical error or whatever happened, 15 Mr. Manes didn't get the letter on April 9th. 16 And I think we can agree by extension that if 17 Mr. Manes had an opportunity to show this letter to Mr. Manes 18 -- sorry, to Mr. Lyons during the course of his testimony, I 19 expect that there wouldn't have been a need for Mr. Butt to 20 go through all of the evidence again today, and spend some 21 twenty (20) or thirty (30) minutes on the chronology and I 22 don't -- and I don't say that in a critical way. My point is 23 that -- 24 MADAM COMMISSIONER: If -- if the letter had 25 come in, or if the -- we don't know what happened to the

1 letter, I gather and there is no record of it having come to 2 the Commission offices. So, what you're saying is that if 3 the letter had in fact been received by Mr. Manes, when it 4 was sent, then he could have done whatever needed to be done 5 in order to have the documents by the time Mr. Lyons 6 testified. Is that -- 7 MR. RICHARD AUGER: Precisely. 8 MADAM COMMISSIONER: Okay. 9 MR. RICHARD AUGER: And that in leaving aside 10 whether or not Mr. Manes had it or it was misplaced, whatever 11 happened I think we can all agree that, you know, the -- the, 12 now, attempted characterization that Mr. Lyons has not been 13 up front, did not conduct diligent searches, et cetera, that 14 these suggestions could have been put to him under oath and 15 he's not -- this is not a trial of his credibility or his 16 reliability and this letter of April 9th of 2003 that on May 17 12th, Morrison Brown says in its cover letter that it was 18 initially faxed on April 9th. 19 If that had have found its way into the 20 hearing room, in my submission, it would have been dealt with 21 appropriately and the appropriate answers would have been 22 given and this is only one example of -- for whatever reason, 23 there may have been a problem and it's simply unfair to go 24 through these letters and to go through the transcript and 25 try to come to some conclusion or to assert that Mr. Lyons

1 was being less than forthright; that's one example. 2 The April letter -- the April 9th letter is 3 one example of a problem that obviously when Mr. Lyons was 4 testifying, he wasn't aware of the exchange of the documents 5 and indeed -- 6 7 (BRIEF PAUSE) 8 9 MR. RICHARD AUGER: -- as I understand the 10 chronology, none of the documents that were -- that are the 11 subject of the requested order today -- my office wasn't 12 advised of their existence or advised of these discussions 13 that were occurring with Morrison Brown and Mr. Manes and I 14 think the date that Mr. Butt had given us was August 6th. 15 August 6 -- yes, it is in Mr. Butt's compendium at Tab 16, 16 Madam Commissioner. 17 MADAM COMMISSIONER: Thank you. 18 MR. RICHARD AUGER: As I understand your 19 chronology, August 6th, 2003 is the first day that my firm 20 was advised of the existence of the summons to Morrison Brown 21 and this entire issue of other documents that may or may not 22 be out there and again, so the only point I'm making is that, 23 you know, again, if there were documents that the Commission 24 -- the Commission Counsel were aware of or suspected were out 25 there it should have either A) been -- advised my firm

1 earlier or B) could have put some of this to Mr. Lyons. 2 So that's just one example of how it's a real 3 problem for My -- My Friends to suggest that Mr. Lyons has 4 not been entirely forthright in conducting his search. 5 MADAM COMMISSIONER: Did Mr. Manes not put to 6 Mr. Lyons when Mr. Lyons was in the witness box that he, 7 being Mr. Manes, had asked Morrison Brown Sosnovitch for the 8 -- for documents and they didn't have any? Is that -- 9 MR. RICHARD AUGER: Precisely and that was my 10 next -- I was just going to move to that point. 11 MADAM COMMISSIONER: I'm sorry, because I 12 thought you said he could have put this to Mr. Lyons and I 13 understood that he had, in fact, put it to Mr. Lyons in the 14 witness box. That he'd asked the firm for any documents and 15 that the firm didn't have any. 16 MR. RICHARD AUGER: That's right and that's -- 17 that was actually the point that I was just moving to as 18 another example or an illustration of the problem. I think 19 the general point I'm making is that it was unclear to all 20 parties and it was unclear to Mr. Manes, it was unclear to 21 Morrison Brown, what searches were conducted, was it off 22 site, was it on site, was it electronic, was it paper? And 23 you're quite right and I have -- and I was going to take you 24 to the quote -- I was looking for it in Mr. Butt's tab and I 25 couldn't find it. So what I have is the extract,

1 unfortunately it's not in my own compendium but I'll read to 2 you the -- 3 MADAM COMMISSIONER: Just give me the date and 4 I can find it from here as well. 5 MR. RICHARD AUGER: Okay. May 8, Madam 6 Commissioner. 7 MADAM COMMISSIONER: Okay. And the page 8 number? 9 MR. RICHARD AUGER: Well, the page number that 10 I have on my materials that were printed out from the 11 website, the page number is page 8 and 9. 12 MADAM COMMISSIONER: Thank you. 13 MR. RICHARD AUGER: And I'll back up a little 14 bit so that we have the context of the exchange. 15 MADAM COMMISSIONER: Is that not on -- at Tab 16 39, page 72(b), that seems to be page 8 and 9 or are you 17 looking at something different? 18 MR. RICHARD AUGER: Sorry, Tab 39? 19 MADAM COMMISSIONER: Tab 39, page 72(b)? 20 MR. RICHARD AUGER: Yes. You're quite right. 21 Thank you very much. 22 MADAM COMMISSIONER: Okay. 23 MR. RICHARD AUGER: That makes it much easier. 24 MADAM COMMISSIONER: All right. Thank you. 25 MR. RICHARD AUGER: So that's exactly what I

1 was referring to, Page 72(b). And this is the exchange and 2 this is, I think, the same evidence that -- that you and I 3 are now discussing. 4 At the top of page 8, Madam Commissioner. 5 MADAM COMMISSIONER: Yes. I'm there. 6 MR. RICHARD AUGER: "Would you have 7 personal knowledge of that or would that 8 have been done by somebody else in your 9 firm at the time? 10 A: It could have been done by someone 11 else. 12 Q: Was there a regular process of 13 destroying files after they -- after you 14 were done working on them or was that 15 something that you would have had to give 16 instruction on? 17 A: Well, we tried to weed them out if 18 we're not using them and we try to do that 19 within a few weeks or months of the -- of 20 acting for them. 21 Q: In this -- in the specific case, Dell 22 Computer, DFS, do you recall whether you 23 specifically gave the instruction to 24 destroy those files to the best of your 25 recollection?

1 A: Probably." 2 And this just, as we're passing through the 3 point, Mr. Butt submits to you that, you know, it's clear -- 4 this is one of the criticisms of the evidence is that it's 5 clear that Mr. Lyons' answer is just not correct or 6 forthright. 7 Well, his answer was "probably". He didn't 8 say yes and he didn't say no and I think on a fair reading of 9 the entire transcript he's doing his best to recall the 10 process and he's -- he's not committing with any certainty 11 which is probably the most honest approach. 12 And as any council in the room would know, you 13 can't be certain without -- you can't be certain without 14 checking with your assistant, without checking your own 15 notes, without checking with your filing clerk exactly what 16 happened with any file whether it's a small firm or a large 17 firm. In any busy practice you just can't say with certainty 18 yes or no. 19 And in my respectful submission, the honest 20 answer was to say "probably" meaning maybe. In any event, I 21 want to continue with the exchange to respond to your 22 comment, Madam Commissioner. It continues 23 "Q: In any event, those files aren't 24 available, you've looked for them? 25 A: Yes, I did."

1 Question -- and this is the part -- the 2 important part; 3 "Q: Now, we've inquired of Morrison Brown 4 Sosnovitch, they've gotten back to us and 5 said they didn't have them. So I take it 6 that when you left them either the files 7 were destroyed or they were destroyed after 8 you left them? 9 A: What was the question again, sorry? 10 Q: Let me ask the question this way, when 11 you left Morrison Brown Sosnovitch do you 12 remember taking the Dell Financial or Dell 13 Computer files? 14 A: Not Dell Financial. Dell Computer 15 might still have been a client." 16 So the important lines I'm trying to take your 17 attention to are line 23, on page 8, where Mr. Manes himself 18 acknowledges to the Inquiry, that he made it -- he made an 19 inquiry of Morrison Brown as to what material they had, and 20 they got back to Mr. Manes and said that they didn't have 21 them either. 22 So, I think to be fair, on a -- on a -- on a 23 whole reading of the evidence and a whole reading of the 24 correspondence and to look at the entire context, it's -- 25 it's just unfair to suggest, for the purpose of this motion,

1 that Mr. Lyons has somehow given up his rights of 2 confidentiality, his obligations of asserting privilege, et 3 cetera. 4 So, just with that introduction, I want to 5 take you to my main submissions on the motion and as I said 6 at the outset, my approach is a little different. My 7 approach is not who's at fault, who's to blame, who received 8 a fax or didn't receive a fax, or who had a perfect memory of 9 conducting searches, et cetera. 10 My focus is -- and in my respectful 11 submission, this point, with the greatest respect, has been 12 missed and the -- and the point is simple, Commission Counsel 13 cannot look at private confidential and privileged documents, 14 it's that simple. 15 And that I know My Friends are suggesting 16 that, well -- and I've read Justice O'Connor's article, I 17 know that the submission is that, well, Commission Counsel is 18 really the same -- Commission Counsel is really in the same 19 shoes as the Commissioner, and that therefore Commission 20 Counsel are entitled to review documents for relevance, and 21 perhaps privilege. 22 And I think My Friend has suggested that, 23 well, what we really want to do is open the boxes, we'll do a 24 preliminary review for rel -- for relevance, and if there's 25 any dispute, or if there's any issues or any concern about

1 privilege, we'll proceed in another forum. 2 In my respectful submission, that's just not 3 practical, and the reason they're not pract -- the reason 4 it's not practical is that relevance and privilege are 5 married, you can't separate them, you can't conduct a review 6 of documents, and say, oh, I'm only going to look at 7 documents and see if they're relevant, but in the back of my 8 mind, I'll keep in mind that you have privilege concerns, and 9 if there's any privilege concern, even though I've looked at 10 it, we'll deal with that on another day. 11 In my respectful submission, a) there's no 12 legal authority to do that, and b) it's unfair and not an 13 appropriate procedure. 14 I've asked -- well Mr. Butt and I have been 15 exchanging correspondence for some time on -- on this issue, 16 and I've asked for authority for the order that My Friend 17 seeks. My Friend, in fairness, referred me to the Consortium 18 case, which I have and I'll take you to eventually, but in my 19 respectful submission, it's of no assistance for the 20 particular order that My Friend is seeking. 21 And so what I want to -- what I now want to do 22 is talk to some of the basic statutory authority, and then 23 some of the principles in case law, that in my submissions, 24 support our position. 25 In my brief of authorities at Tab 1, is the

1 Public Inquiries Act. And so the simple starting point is 2 that a summons was issued, and it was delivered to a number 3 of parties, but for the purpose of this motion, there was a 4 summons delivered to Morrison Brown and Section 7 of the 5 Public Inquiries Act does give the Commission power to do 6 that and that was done with jurisdiction and done properly. 7 "Section 7: The Commission may require any 8 person by summons --" 9 Subsection B says: 10 "To produce in evidence at an Inquiry such 11 documents and things as the Commission may 12 specify relevant to the subject matter of 13 the Inquiry and not inadmissible in 14 evidence at the Inquiry under Section 11." 15 And Section 11, as we well know, is the 16 express provision relating to privilege. 17 "Section 11: Nothing is admissible in 18 evidence at an Inquiry that would be 19 inadmissible in a court by reason of any 20 privilege under the law of evidence." 21 So, again, basic principle that if Commission 22 Counsel was interested in documents and, indeed, if the 23 Commissioner is interested in documents or interested in 24 persons that may have relevant evidence, the summons may be 25 issued and that's what occurred.

1 But in my respectful submission, the problem 2 that we're now faced with is that Morrison Brown and 3 Commission Counsel entere