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Bob Virk, left, and Dave Basi stand outside Vancouver’s B.C. Supreme Court building in May 2010 during a lunch break.John Lehmann/The Globe and Mail

The Supreme Court of British Columbia has denied the Auditor-General access to $6-million in legal bills paid by the government to defend two former ministerial aides who pleaded guilty to breach of trust.

Chief Justice Robert Bauman ruled the files are covered by solicitor-client privilege and are beyond the reach of auditors.

The ruling may hamper, but it is not expected to halt, a performance audit that Auditor-General John Doyle is conducting into the government's overall legal indemnity program. Although the audit is looking at 100 cases covered by the government since 1999, at the heart of it are questions about the bills rung up by Dave Basi and Bob Virk, who were convicted in 2010.

Under the indemnity program, the government covers the costs of employees caught in legal actions during the course of their employment. But the Basi-Virk case is unusual because the defence bills got paid even though both men admitted they violated their oaths of office, leaking confidential government information about the sale of BC Rail in return for bribes.

"What this emphasizes again is why there has to be a public inquiry. People want to know what was done, why it was done, who was responsible for it and what was the excuse or explanation," said Leonard Krog, the NDP justice critic.

Mr. Krog, who followed the Basi-Virk case during a pre-trial process that lasted several years, said he was disappointed with the ruling.

"The decision may well be correct on the law and in that sense it is not a surprise. But certainly there was strong public hope that the Auditor-General would have access to absolutely everything in the preparation of his report," Mr. Krog said.

"I'm disappointed, but I do understand the decision and I respect the decision," said Conservative MLA John van Dongen, who intervened in the case in support of the Auditor-General.

Mr. van Dongen said he expects Mr. Doyle to complete his investigation despite the ruling.

"The court did say the Auditor-General has sufficient access under his Act to still do a credible audit," Mr. van Dongen said. "I would expect he will continue his process."

An official in the Auditor-General's office said the ruling is under study and no comment is planned.

In the judgment, Chief Justice Bauman made it clear that solicitor-client privilege is a central right that cannot be tampered with.

"I state my conclusion: Here, as in so many other cases of conflict between other values and the principle of solicitor-client privilege, the privilege must be protected; it must prevail against abrogation by inference," he stated.

"It would be wrong to conclude that the result in this case represents the triumph of secrecy over transparency and accountability," he said. "It rather represents the reaffirmation of a principle which is a cornerstone value in our democracy and which has been so for hundreds of years."

Critics have accused the government of trying to hide information related to the payment of the Basi-Virk bills, but Chief Justice Bauman said the government was right in arguing that the material, which was held by the third-party lawyers appointed by government, could not be released.

"Solicitor-client privilege is not a lawyer's 'trick' to avoid proper scrutiny … it is a critical civil right," he said. "All citizens must be able to freely discuss their legal positions with their lawyers and to take frank advice thereon, secure in the knowledge that this relationship – that between solicitor and client – is as sacred as any secular business relationship can be."

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