Judge rejects auditor general's bid to access Vitalité's internal audits on travel nurses

A New Brunswick judge has rejected the auditor general's bid to access Vitalité Health Network's internal audits of its controversial travel-nurse contracts.

Auditor General Paul Martin sought a court order to compel the regional health authority to disclose the documents as part of his investigation into the management and use of private agency nurses by Vitalité, Horizon and the Department of Social Development between Jan. 1, 2022, and Feb. 29, 2024.

But Court of King's Bench Chief Justice Tracey DeWare dismissed his application, saying she's not satisfied the Auditor General Act provides an explicit waiver of Vitalité's claims of litigation privilege or solicitor-client privilege.

These privileges are "foundational to our legal system," DeWare wrote in her decision, dated June 2.

"The Court can only endorse a legislative interpretation which abrogates these privileges in circumstances where the intention of the Legislature can be clearly discerned to have contemplated the scope of such an exceptional authority."

Vitalité is entitled to costs of $2,000, she ruled.

CBC News requested an interview with Martin, including whether he intends to appeal. In response, his office sent an emailed statement, saying he received notice of the dismissal last week and is "currently assessing the next steps."

Vitalité did not provide an interview but in an unsigned emailed statement said it welcomes the decision and remains committed to accountability and quality care.

"The lessons learned from various audits have guided improvements in our procurement and contract management processes to optimize the use of public funds," the email said.

Vitalité continues to work toward phasing out the use of agency staff by the winter of 2026, it added.

In a scathing report last June, Martin concluded Vitalité spent $123 million in travel-nurse contracts dating back to 2022, when the regional health authority signed its first deal with Canadian Health Labs during the COVID-19 pandemic. The Ontario-based agency charged about $300 an hour per nurse — roughly six times what a local staff nurse earns.

"The contracts with private nursing agencies were not reflective of best practices and did not demonstrate value for money," Martin said at the time.

As part of that audit, launched in March 2024, Martin requested "various information and documents" from Vitalité, including internal audit reports on the use of agency nurses.

Vitalité refused to provide the internal audit reports.

"Due to the lack of co-operation from Vitalité, risks that they identified in the audit reports and to what extent those risks were addressed is not known," Martin told MLAs.

Internal audits were to probe 'irregularities'

Vitalité had commissioned the audits after it "noticed irregularities in some of the services rendered by the agency nurses which were not in conformity with the terms set out in the governing contracts," according to DeWare's decision.

No details are provided, but "in order to investigate potential deficiencies in the services rendered by the nursing agencies, [Vitalité] commissioned an internal audit of the performance of one of the contracts spanning the period between August 2022 and June 2023."

Vitalité alleges these audits "confirmed the existence of deficiencies in the performance of the agency nurses' contract with one of the agencies — Canadian Health Labs," DeWare wrote. In addition, it contends they are subject to both litigation and solicitor-client privilege "as they were commissioned in anticipation of litigation with CHL."

The company has launched three lawsuits against Vitalité for allegedly breaching three of its contracts — two expired and one still in force. It's seeking compensation, including punitive, aggravated and special damages.

Vitalité has filed statements of defence, as well as counterclaims in all three cases.

Last week, the legislature also adopted a law designed to get out of the contracts without facing any legal or financial penalties.

Martin argued act covers privileged information

Martin applied to the court for an injunction on Oct. 9. "Under the Auditor General Act, I have rights of access to any information relating to the performance of my duties," he wrote in a sworn affidavit. This includes privileged information, he argued.

Section 13 (a) of the act says the auditor general is entitled to "free access at all convenient times to information, including files, documents, records, agreements and contracts, despite that they may be confidential or private, that relates to the fulfilment of his or her responsibilities."

According to Martin, changes the legislature made to that section in 2014, including the auditor general's ability to obtain "private and confidential" information, were specifically made to address this type of situation, DeWare wrote. Discussions surrounding the amendments demonstrate there was a clear desire to enhance the auditor general's authority to obtain necessary information, Martin argued.

Vitalité says disclosure would prejudice litigation

Vitalité countered that disclosure of the internal audit reports "would prejudice its ability to prosecute" the action against Canadian Health Labs, according to Deware, and that Section 13 (a) of the act "does not explicitly displace or supersede otherwise valid claims of litigation or solicitor-client privilege."

If the New Brunswick Legislature had intended for the section to override litigation or solicitor-client privilege, it would have explicitly stated so in the statute, as it does in the Ombudsman Act, Vitalité argued.

DeWare noted the Ontario Court of Appeal recently upheld a trial court decision that the Auditor General Act of that province, which, similar to New Brunswick's, does not contain a specific waiver of a valid privilege, "did not authorize access nor compel disclosure of privileged information."

The Supreme Court of Canada also considered a similar issue when interpreting a section of Alberta's Freedom of Information and Protection of Privacy Act in 2016, said DeWare. The country's highest court ruled legislative language must be interpreted restrictively when determining if solicitor-client privilege may be set aside.

Act not explicit, judge rules

"While I appreciate the [auditor general's] argument, the addition of the words 'confidential and private' to section 13 indicates an expanded scope to the information which could be sought, it falls short of explicitly stating an intention to have access to 'privileged' documents," DeWare said.

She pointed out that with the 2014 amendments, the legislature didn't adopt the "explicit" language of Nova Scotia's Auditor General Act — "solicitor-client privilege, litigation privilege, settlement privilege and public interest immunity."

"The language of the Nova Scotia statute could not be any clearer."

Section 13 (a) of the New Brunswick act "does not grant the Auditor General the authority to require production of documents or information which are properly subject to a solicitor-client or litigation privilege," DeWare ruled.

Canadian Health Labs could not immediately be reached for comment.