2019 NBCA 74, 2019 NBCA 74

COURT OF APPEAL OF COUR D’APPEL DU NEW BRUNSWICK NOUVEAU-BRUNSWICK 47-18-CA BOYD R. ALGEE and BOYD R. ALGEE ARCHITECT LTD. APPELLANTS BOYD R. ALGEE et BOYD R. ALGEE ARCHITECT LTD. APPELANTS - and - - et - THE ARCHITECTS’ ASSOCIATION OF NEW BRUNSWICK RESPONDENT L’ASSOCIATION DES ARCHITECTES DU NOUVEAU-BRUNSWICK INTIMÉE Algee et al. v.

The Architects’ Association of New Brunswick, 2019 NBCA 74 CORAM: The Honourable Justice Green The Honourable Justice French The Honourable Justice LaVigne Algee et autre c. l’Association des architectes du Nouveau-Brunswick, 2019 NBCA 74 CORAM : l’honorable juge Green l’honorable juge French l’honorable juge LaVigne Appeal from the decisions of the Committee of Inquiry dated January 2, 2018 and March 20, 2018 and of the Council of the Architects’ Association of New Brunswick dated May 1, 2018 Appel des décisions du comité d’enquête datées du 2 janvier 2018 et du 20 mars 2018 et de la décision du Conseil des architectes de l’Association des architectes du Nouveau-Brunswick datée du 1 er mai 2018 History of Case: Historique de la cause : Decision under appeal: Unreported Décision frappée d’appel : inédite Preliminary or incidental proceedings: None Procédures préliminaires ou accessoires : aucune Appeal heard: January 24, 2019 Appel entendu : le 24 janvier 2019 Judgment rendered: October 10, 2019 Jugement rendu : le 10 octobre 2019

Reasons for judgment: The Honourable Justice French Concurred in by: The Honourable Justice Green The Honourable Justice LaVigne Counsel at hearing: For the appellants: Rodney J. Gillis, Q.C. For the respondent: David G. O’Brien, Q.C. and Deirdre L. Wade, Q.C. Motifs de jugement : l’honorable juge French Souscrivent aux motifs : l’honorable juge Green l’honorable juge LaVigne Avocats à l’audience : Pour les appelants : Rodney J. Gillis, c.r. Pour l’intimée : David G. O’Brien, c.r. et Deirdre L. Wade, c.r. THE COURT The appeal of Council’s decision on penalties is allowed, with costs of $5,000.

The appeal of Council’s decision ordering the appellants pay 75% of the Association’s costs is dismissed. This Court orders, as penalties under s. 19(2), a reprimand, a fine of $1,000 and the members be notified of the decisions made by the Committee of Inquiry, the Order of Council, and this decision, and all be made available to the public. LA COUR L’appel de la décision du Conseil sur les sanctions est accueilli, avec dépens de 5 000 $ L’appel de la décision du Conseil ordonnant aux appelants de payer 75 % des frais supportés par l’Association est rejeté. À

titre de sanctions prévues au par. 19(2), la Cour ordonne une réprimande, une amende de 1 000 $ et la notification aux membres des décisions rendues par le comité d’enquête et de l’ordonnance du Conseil ainsi que de la présente décision. La Cour ordonne également que ces sanctions et décisions soient toutes mises à la disposition du public. The judgment of the Court was delivered by FRENCH, J.A. I. Introduction [ 1 ] The appellants, Boyd R. Algee and his professional corporation, Boyd R.

Algee Architect Ltd. (“the Corporation”), were found guilty by a Committee of Inquiry, which had been appointed by the Council of the Architects’ Association of New Brunswick to deal with complaints made by means of a Disciplinary Hearing. [ 2 ] At the beginning of the Disciplinary Hearing, the Corporation pled guilty to one count of failing to pay a subconsultant promptly, in violation of By-law 14.6.15 of the Code of Ethics and Professional Misconduct under An Act Respecting the Architects’ Association of New Brunswick , S.N.B. 1987, c. 66 .

Following a two-day hearing, the Committee of Inquiry found the Corporation guilty of two additional counts of failing to pay subconsultants promptly and using the funds that should have been paid to subconsultants “for its own purposes,” also in violation of By-law 14.6.15. It provides:

14.6.15 An Architect receiving monies for services provided by others shall not use such monies for the Architect’s own purposes and shall distribute them promptly to those so qualified. (

a) This By-law requires an Architect to fulfill the expectation that funds received by an Architect on behalf of others will be properly managed. (

b) Receiving monies for services provided by others would include fees or disbursements invoiced to a client for project-related services provided under contract to the Architect by subconsultants and suppliers. This provision does not apply to employees of the Architect. The “Guidelines to the AANB By-law No. 14” provide the following commentary with respect to By-law 14.6.15: The monies received should be distributed or paid to others and not diverted for the Architect’s own purposes and therefore be inaccessible. Payment may be in full or on a pro-rata basis on the basis of the monies received.

Payment shall be made “promptly as agreed” on the basis of good business practice, e.g. monthly or upon receipt of monies. [ 3 ] Also, the Committee of Inquiry found Mr. Algee guilty for his role in the Corporation’s failure to pay its subconsultants promptly. It found him guilty of: (1) failing to supervise the business of the Corporation; (2) engaging in conduct involving a wanton disregard of the rights of others; and (3) failing to conduct his (and the Corporation’

s) affairs in a professional manner and refrain from acts that would reflect unfavourably on the profession. [ 4 ] As required by the Act , the Committee of Inquiry provided Council with its written recommendations for penalties (s. 19). It included a recommendation that Council order Mr. Algee to negotiate Minutes of Settlement with the unpaid subcontractors within sixty days or he would be automatically suspended. The Committee did not recommend a reprimand or a fine and it saw no need for public notification. It also recommended that Mr. Algee pay 75% of the Association’s costs of the inquiry.

Council did not accept the recommendations from the Committee on penalties. Instead, Council issued a reprimand, imposed a fine of $1,000.00 and suspended Mr. Algee and the Corporation from practice for four months. It also ordered that notice of the misconduct be given to members of the profession and to the public (by placing an ad in local newspapers). Council accepted the recommendations from the Committee on costs and it ordered Mr. Algee and the Corporation pay 75% of the Association’s costs (being $104,503.86 of approximately $139,000), subject to taxation in accordance with s. 20(2). [ 5 ] Mr.

Algee and the Corporation were self-represented at the Disciplinary Hearing before the Committee of Inquiry (including at the separate hearing to determine what penalties and costs the Committee would recommend to Council), and the hearing before Council to decide what penalties and costs would be imposed. [ 6 ] By consent, Council’s order on penalties and costs was stayed pending this appeal. At times in these reasons, Mr. Algee and the Corporation are referred to independently. Where Mr.

Algee alone is mentioned, it may be assumed the reference also applies to the Corporation unless the context indicates otherwise. [ 7 ] On appeal, Mr. Algee submits: • the Committee of Inquiry’s findings of guilt and the Council’s decision on penalties and costs are both grounded in the mistaken view

(1) By-law 14.6.15 impressed funds received from clients with a trust for subconsultants and suppliers and (2) an Architect’s obligation in respect of such funds is the same as a lawyer’s obligation in relation to funds held in a segregated trust account; • the Committee (1) misapprehended the evidence by finding a violation of the obligation to pay subconsultants despite the fact that there were “significant discrepancies in the evidence as to precisely what was owed to whom,” and (2) erroneously required Mr.

Algee and the Corporation prove that the subconsultants had been paid properly, shifting the burden of proof for misconduct from the Association to them; and • Council erred by failing to give reasons for its decision on penalties and costs.

[ 8 ] For the reasons that follow, I do not agree the Committee of Inquiry’s findings of guilt or Council’s order to pay 75% of the Association’s costs are the product of an error. However, Council’s decision on penalties must be set aside; it is incapable of meaningful review on appeal and the penalties imposed are unreasonable. I would not refer the issue of penalties back to Council. In view of the considerable resources expended on this matter thus far, I would instead exercise the discretion afforded this Court by s. 22(4) and make the order that Council could make.

Like the Committee, I would not order a suspension from practice as part of the penalties or order public notification. I would order a reprimand and a $1,000 fine. II. Background [ 9 ] In addition to providing background for the issues raised directly as grounds of appeal, what follows seeks to provide context for the imposition of penalties by this Court. [ 10 ] Mr. Algee has been a member of the Association since January 1985, and the Corporation has held a certificate to practice since December 1989. This matter represents a first finding of misconduct and Mr.

Algee’s professional abilities or competency are not in issue. On the contrary, a representative of the Province of New Brunswick, the client in all contracts relevant to these proceedings, expressed a high level of confidence in Mr. Algee’s professional ability. [ 11 ] Mr. Algee’s practice has been for many years run by both Mr. Algee and his wife.

He would typically focus on the delivery of professional services and she, as office manager/bookkeeper, would attend to its administrative aspects, including the preparation of invoices and the payment of expenses, including payments to subconsultants. [ 12 ] There was no dispute that at times, between 2012 and 2015, Ms. Algee’s health deteriorated to the point where she became incapacitated and the ability to perform her duties as bookkeeper was impaired. While there were different views on the significance of Ms.

Algee’s inability to perform her usual duties, the Committee of Inquiry did not reject the submission that it contributed to the Corporation’s financial disarray, including the delayed payments to subconsultants and others. This said, the Committee correctly concluded her health provided no excuse for Mr. Algee or the Corporation’s failure to fulfill their professional obligations under the Act and by-laws. A.

Complaints [ 13 ] I n August 2016, Design Plus Architecture Inc. filed a complaint with t he Association alleging the Corporation had not paid it promptly for services rendered in relation to the construction of a school in Moncton. The complaint claimed $29,000 was unpaid under five invoices, all issued between February 2014 and March 2015. [ 14 ] Design Plus had been retained in June 2011 to provide services in relation to a contract the Corporation had with the Province for the construction of two schools, commonly identified as the Moncton North and the New Riverview School Project s.

The contract with the Province required the Corporation, as the Prime Consultant, to provide and/or arrange for the supply of a range of professional services for the design and construction of both schools, all of which were specified in the contract. To fulfill its obligations, the Corporation retained, as subconsultants, the services of Design Plus and various other professionals, such as soils, mechanical and electrical engineers. While Design Plus provided services in relation to the Moncton North School Project, other subconsultants provided services for both schools.

The contract provided for the Province to pay the Corporation a fixed fee of $2,000,000. The Corporation’s contracts with its subconsultants obligated it to pay them a total of $1,400,000. Of this, $400,000 was payable to Design Plus. Practically speaking, in terms of cash flow, of the $2,000,000 the Corporation would receive from the Province, it would pay 70% of that amount to its subconsultants and it would retain or earn 30% ($600,000) for its own services. [ 15 ] For obvious reasons, it is acknowledged there was no privity of contract between the Province and any of the Corporation’s subconsultants.

Fees received by the Corporation were deposited into its general account and, as its Financial Statements show, it recorded the full amount received as revenue. Amounts paid to subconsultants were deducted from revenue, as “Consultant fees.” This left the Corporation with a “gross profit” from which the Corporation’s operating expenses were deducted to arrive at the Corporation’s income/profit. [ 16 ] In September 2016, Mr. Algee responded in writing to Design Plus’s complaint.

He questioned the amounts claimed to be due and raised a number of issues regarding the allegations made by Design Plus; however, he did not deny that funds were owed, nor did he suggest he had not been paid by the Province for the services invoiced by Design Plus between February 2014 and

March 2015. [ 17 ] It should be noted that most of the services rendered to the Province by the Corporation and its subconsultants were provided long before 2014; most were supplied in 2011 and 2012. By the end of 2013, almost all services had been provided and more than 90% of the contract price ($1,850,000) had been paid by the Province to the Corporation. The remaining work, of $150,000 (plus a further $38,000 under change orders), was completed in 2014 or later.

By March 2015, the Province had paid all amounts due to the Corporation except for a hold back of $40,000, pending a final review. [ 18 ] On November 1, 2016, a second complaint was filed. Peerless Consulting Ltd. claimed the Corporation still owed it $97,563.61, of the $424,290.40 the Corporation contracted to pay for engineering services rendered in connection with the Moncton North and New Riverview School Projects. Peerless also claimed it was owed approximately $33,000 on five other, more recent, school projects. [ 19 ] In his response to the Peerless complaint, Mr.

Algee raised only minor issues with the amounts claimed to be due and, while he acknowledged the amount owed on the Moncton North and the New Riverview School Projects was old, he noted the amounts owed on the other school projects were more recent and, in some cases, they were current. Mr. Algee explained that the illness of his wife in 2012, 2013 and 2015 had a negative impact on the day to day administration of his practice and the Corporation’s financial affairs. Recognizing the Corporation was behind in its financial obligations, Mr.

Algee stated he had advised Peerless that his office building would be put up for sale to “clear the owed arrears.” He noted that until Peerless filed its complaint, it had continued to quote and “work on jobs” for him. [ 20 ] The Association requested financial information and in December 2016, Mr. Algee delivered copies of:

(1) Financial Statements back to 2010; (2) books and ledgers; (3) bank statements; and (4) contracts, etc. Most of these items became exhibits at the Disciplinary Hearing. [ 21 ] On February 8, 2017, Council adopted, as a third complaint, a report issued by the Registrar of the Association into other alleged violations of the Act and by-laws and it ordered that a Committee of Inquiry be appointed to deal with the subject matter of all three complaints by means of a disciplinary hearing. On April 20, 2017, the Registrar issued a Notice of Inquiry, indicating the Committee would meet to consider whether Mr.

Algee and the Corporation were guilty of the four counts outlined in the Notice. B. Proceedings before the Committee of Inquiry [ 22 ] The Disciplinary Hearing was held on November 21 and 22, 2017. At its commencement, the Corporation pled guilty to the first count of failing to promptly distribute to Design Plus funds received from the Province . On January 2, 2018, the Committee of Inquiry rendered its written decision in relation to the three remaining counts.

It found the Corporation guilty of two counts of failing to promptly distribute monies to Peerless (and various other subconsultants) and to using such funds for its own purposes, contrary to By-law 14.6.15. The services provided by the subconsultants related not only to the Moncton North and New Riverview School Projects but also to other school projects for the Province. Further, the Committee found Mr.

Algee guilty of one count of misconduct, which included: (1) failing to properly supervise the business and affairs of the Corporation (contrary to s. 13(4) of the Act and By-law 14.6.1); (2) engaging in conduct involving a wanton disregard for the rights of others (contrary to By-law 14.6.4); and (3) failing to conduct his affairs in a professional manner, and failing to refrain from acts which would reflect unfavourably on the profession (contrary to By-law 14.6.5). [ 23 ] On February 13, 2018, the Committee of Inquiry held a one-day hearing regarding penalties and costs.

A Committee’s responsibility, after a disciplinary hearing, is to “deliver a decision in writing to Council […] which shall include a statement of the facts as found by the Committee of Inquiry, the reasons for its finding, and recommendations as to the penalty to be imposed on the architect ” (s. 19(1)). [ 24 ] At the hearing on penalties, the Association maintained, as it previously had, that funds received by an architect for services provided by subconsultants were held in trust and the architect’s obligation in respect of such funds is the same as that owed by a lawyer in relation to funds held in a segregated trust account.

These positions, both of which were disputed by Mr. Algee, are set out in the Association’s “ Pre-Sentencing Brief to the Committee of Inquiry on behalf of the AANB”: 15. This provision creates an obligation on architects to hold funds “in trust” for sub-consultants , and to pay those funds “promptly” and

“on the basis of good business practice.” Converting funds held for sub-contractors to the architect’s own purposes is a clear violation of this rule. 16. This provision in the AANB Code of Ethics is analogous to Rule 4(2) of the Uniform Trust Account Rules […] enacted under the Law Society Act […] While the LSA along with the Professional Code of Conduct govern the practice of law as a whole, the Trust Rules specifically address the handling of monies held in trust for clients. 17.

Section 4(2) of the Trust Rules reads as follows: 4(2) A member shall not withdraw or transfer money from a trust account except […] […] but in no case shall withdrawals or transfers exceed the balance of the money held in trust for the client. [Emphasis added.] [ 25 ] In the absence of any reported decisions involving architects having violated an obligation similar to By-law 14.6.15, the Association advocated for the Committee to consider sentencing decisions where lawyers had been found guilty of misappropriation of trust funds and it summarized a number of such decisions in its brief.

While t he Association also noted the applicability of the Ogilvie factors to sentencing for professional misconduct ( Law Society of British Columbia v. Ogilvie , 1999 LSBC 17, [1999] L.S.D.D.

No. 45 (QL)) , it submitted that, despite those factors, the Law Society of New Brunswick regards disbarment as the appropriate penalty for misappropriation of trust funds, absent exceptional circumstances: Although the LSNB Disciplinary Panels utilize these criteria when determining an appropriate penalty in the circumstances of a particular case, in the absence of exceptional circumstances, the penalty for the lawyers who misappropriate trust monies is disbarment. […] [para. 20] It was on this basis the Association maintained Mr. Algee ought to be suspended from practice for three to six months.

In Ogilvie , the Discipline Hearing Panel stated the following regarding penalties for professional misconduct : […] While no list of appropriate factors to be taken into account can be considered exhaustive or appropriate in all cases, the following might be said to be worthy of general consideration in disciplinary dispositions:

a) the nature and gravity of the conduct proven;

b) the age and experience of the respondent;

c) the previous character of the respondent, including details of prior discipline;

d) the impact upon the victim;

e) the advantage gained, or to be gained, by the respondent;

f) the number of times the offending conduct occurred;

g) whether the respondent has acknowledged the misconduct and taken steps to disclose and redress the wrong and the presence or absence of other mitigating circumstances;

h) the possibility of remediating or rehabilitating the respondent;

i) the impact on the respondent of criminal or other sanctions or penalties;

j) the impact of the proposed penalty on the respondent;

k) the need for specific and general deterrence;

l) the need to ensure the public's confidence in the integrity of the profession; and

m) the range of penalties imposed in similar cases. [“Penalty”, para. 10] [ 26 ] The Committee of Inquiry did not accept the Association’s position and it did not recommend a suspension from practice. In its March 20, 2018 report, entitled “Recommendations Regarding Penalty, Costs, and Publication”, the Committee explains: while “stress[ing] the seriousness of this case and the misappropriation of monies effectively held in trust for subconsultants”, the Committee also considered the “itemized issues which warrant consideration when considering penalty” (pp. 4-5).

The “itemized issues which warrant consideration” refers to the Ogilvie factors, which had been itemized in the Association’s Pre-Sentencing Brief. [ 27 ] In “recommending a penalty at variance with that suggested by” the Association, the Committee stated it had decided instead to impose a penalty “which intends to strike a balance between the serious nature of the respondents’ infractions and the positive aspects of the respondents’ character, lack of previous offences, acknowledgement of misconduct and remediating steps being taken .” The Committee concluded by stating that it “believe[s] that the recommended penalty is just and fair in the circumstances” (pp. 5-6). [ 28 ] The reference to “remediating steps being taken,” is the Committee referring to Mr.

Algee’s ongoing efforts and commitment to pay his subconsultants. It is further to this that the Committee recommended Council order Mr. Algee finalize within 60 days Minutes of Settlement setting out the terms of payment with its subconsultants, failing which he would be immediately suspended from practice. It also recommended Mr. Algee be suspended if “any verified additional allegations [are] brought” for failure to pay promptly. The Committee relied on s. 19(2)(

h) of the Act as authority for this recommendation; it permits Council, when imposing penalties, to “make such other order as it considers just and fair in the circumstances.” The Report states the following : COI Recommendation Regarding Penalty : The COI stress the seriousness of this case and the misappropriation of monies effectively held in trust for subconsultants . As stated in the COI decision of January 2, 2018, we recognize the unfortunate health issues of Mrs. Algee; however, Mr.

Algee is the architect and director of [the Corporation] with the obligation to oversee management of the firm including the important matter of payments to subconsultants. Although not given extensive emphasis during the hearing, we agree with Mr. O’Brien that the subconsultants are the victims and must assume that they were subject to economic, and possibly personal, stresses when not properly paid. Mr. O’Brien’s pre-sentencing brief, on Page 6, itemized issues which warrant consideration when considering penalty. The Itemized

issues certainly include consideration of the seriousness of the conduct, but also include consideration of the character of the respondent, number of previous offences, acknowledgement of misconduct, and remediating steps being taken, among other matters . Mr. Algee in his submission took issue with the case law presented by Mr. O’Brien for other professional jurisdictions regarding relevancy and applicability to his situation in the architectural profession.

The COI however believe that the over-riding principles of the referenced professions include ethical and procedural protocols applicable to the architectural profession. Specific acts of misconduct have consequences under the Act and by-laws of the AANB as do acts of misconduct for other professional jurisdictions. The COI are recommending a penalty at variance with that suggested by Mr. O’Brien.

All matters considered, the COI recommend the following penalty, which intends to strike a balance between the serious nature of the respondents’ infractions and the positive aspects of the respondents’ character, lack of previous offences, acknowledgement of misconduct and remediating steps being taken : 1. [Mr. Algee and the Corporation] must negotiate Minutes of Settlement with all subconsultants involved in this action, including reconfirmation of the agreement previously made with Design Plus.

These agreements must be finalized within 60 days of the date of final decision on this matter by AANB Council, signed by [Mr. Algee for the Corporation] and by the respective subconsultants, and submitted to the AANB Council for their records. […] Consistent with clause 19(2) (

h) of the Architects’ Act , the COI believe that the recommended penalty is just and fair in the circumstances . [pp. 4-6] [Emphasis added.] [ 29 ] W hen making its recommendations on penalties, the Committee was undoubtedly mindful of the substantial costs order it would also recommend. Although an order to pay costs under s. 20 of the Act is restitutive in nature and not intended as a further penalty, the fact a significant costs order is to be made may factor into the crafting of an appropriate penalty.

The Committee touched on the distinction between a penalty and an order for costs in its reasons (see also Allen v. The Law Society of New Brunswick , 2017 NBCA 32 , [2017] N.B.J. No. 190 (QL)). [ 30 ] The Committee recommended Mr. Algee and the Corporation be ordered to pay 75% of the Association’s costs (estimated at that point to be in the range of $110,000 – $125,000). This recommendation would later be accepted by Council. The Association had proposed to the Committee that it recommend Mr.

Algee pay 90% of its costs, a reduction of 10% to reflect the fact this was the first time the Association had gone through a complaint and disciplinary process under By-law 14.6.15. The Committee’s recommendation that Mr. Algee pay 75% was based on its conclusion that an additional 15% was warranted to reflect the cost to the Association of “emphasizing and reinforcing” with its members the “ ethical and procedural protocols applicable to this case […] and their seriousness.” While the Committee stated it could not “comment on or verify the truth” of Mr.

Algee’s assertion that, while he might be the first architect to be charged under this By-law, he was not the first to have failed to pay subconsultants promptly, it recognized this proceeding contributed to the Association reinforcing with its members the seriousness of this previously unprosecuted obligation. The Report states: In arriving at recommended costs to be assessed to the respondents, the COI is prepared to recommend that 10% of the inquiry costs, the upper limit proposed by Mr.

O’Brien, be allowed as legal advice and developmental input to the AANB in regard to possible cases of this type going forward. In his submission, Mr. Algee suggested that [Mr. Algee and the Corporation] have been the first in New Brunswick to be subject to formal inquiry for non-payment of subconsultant fees in a timely manner, but not the first architects to have committed such misconduct.

The COI cannot of course comment on or verify the truth of this assertion; we are however prepared to recommend an additional 15% of the final itemized costs not be assessed to the respondents, but rather be seen as monies undertaken by the AANB , together with publication as further recommended in this document, to emphasize and reinforce with its membership the ethical and procedural protocols applicable to this case, to our profession, and their seriousness . Therefore, with reference to Clause 20(1) (

a) of the Architects’ Act , the COI recommend that costs be payable by the respondents to the AANB in the amount of 75% of the final itemized costs of the inquiry. [p. 7] [Emphasis added.] C. Proceedings before Council

[ 31 ] On May 1, 2018, at 1 p.m., Council held a meeting to address the issue of penalties and costs. Later that day, Council issued its order. Council had been provided with the Committee’s misconduct decision and its “Recommendations Regarding Penalty, Costs, and Publication” report. Also, the Association provided Council with a “Pre-Sentencing Brief to the Council of the AANB” and a draft order, which left blanks in relation to the amount of any fine or the duration of any suspension. Council heard oral submissions from counsel to the Association, as well as from Mr. and Ms. Algee. Council’s Order provides: 1.

Formal reprimands are hereby issued […]; 2. The membership of Algee […] is suspended for a period of four months […]; […] 7. (a) 75% of the costs incurred by the Association in conjunction with this matter are to be paid to the Association […]; (

b) Said costs shall be payable […] as follows: (i) $15,000 to be paid on or before the termination of the suspension […], said payment being a condition precedent to Algee being reinstated […]; (ii) 1/3 of the balance ($29,834.62) to be paid within six (6) months of the reinstatement […]; (iii) 1/3 of the balance (29,834.62) to be paid within twelve (12) months […]; and (iv) The remaining 1/3 ($29,834.62) to be paid within eighteen (18) months […]. (

c) Any failure, regardless of the reason, to pay in full any component of the cost award as referenced immediately above as due shall, without further Order of Council, result automatically in the immediate and indefinite suspension of the membership of Algee […] until such component has been paid in full; 8. […] a fine of $1,000 to be paid by Algee prior to the reinstatement of the membership and certificate of practice. 9. The Executive Director shall notify the AANB membership of this Order […]. 10.

The Executive Director shall notify the general public of this Order by way of a one-time publication in each of the Saint John Telegraph Journal and Moncton Times Transcript newspapers […]. 11. The report of the findings of fact made by the Committee of Inquiry and this Order of Council shall be made available to the public […]. 12. The Registrar is directed to […] take any further action incidental to the implementation of this Order, or any of its terms and conditions. [ 32 ] The Order does not contain reasons and separate written reasons for the Order were not provided.

On appeal, the Association points to the minutes of the May 1, 2018 meeting, as providing Council’s reasons for making the Order.

III.

Grounds of Appeal [33] The Notice of Appeal claims Council erred in its decision “with respect to Penalties and Costs […] dated May1, 2018” by: • considering the findings of fact and recommendations of the Committee of Inquiry and accepting that the by-laws created a trustfund for monies received by the Corporation, • imposing a penalty of suspension, publication of a reprimand and payment of costs based on By-law 14.6.15, • imposing a penalty of suspension, publication of a reprimand and payment of costs based on By-laws 14.6.1, 14.6.4, and 14.6.5.,and • imposing a penalty that is contrary to the weight of the evidence.

IV. Standard of Review [34] There is no dispute regarding the standard of review; it is reasonableness. In relation to the imposition ofpenalties by a professional body, this Court has stated in Richardson v. Law Society of New Brunswick, 2011 NBCA 108, 381 N.B.R.(2d) 391: With respect to the appropriate sanction, courts are reluctant to vary sanctions imposed by a profession's discipline committee: LawSociety of New Brunswick v. Ryan, 2003 SCC 20, [2003] 1 S.C.R. 247.

That deference is derived from the legislated authorization of self-governance and consequent belief that members of the profession, because of their expertise, are the best judges of the appropriatepenalty for one of their peers. The Discipline Committee's extensive reasons underlying the sanction are unassailable (see Pearlman v.Manitoba Law Society Judicial Committee, (CSC), [1991] 2 S.C.R. 869, [1991] S.C.J. No. 66 at paras. 39-40 (QL) andBouhamdani v. Association of Professional Engineers and Geoscientists of New Brunswick, 2004 NBCA 84, [2004] N.B.J. No. 429(QL)). [para. 4] V. Analysis A.

Appeal against guilt [35] In addition to the Notice of Appeal claiming Council erred in its decision “with respect to Penalties and Costs[...] dated May 1, 2018,” the Appellants’ Submission declares that the appeal is “directed at the penalty imposed” by Council; however,the Submission goes on to allege the “determinations on [both] guilt and penalty were manifestly unsustainable in law, and in fact, areoutside of the range of reasonable outcomes, and therefore, should be set aside” (para. 4). The Association responded to these claims andI will address my reasons for rejecting Mr.

Algee’s challenge to the Committee’s determination of guilt before turning to what I view asthe primary target of this appeal – Council’s imposition of penalties and costs. [36] The right to appeal the Committee’s finding of guilt is confined to a question of law alone. The Act providesfor an appeal to this Court from any disciplinary decision or order “on any ground of appeal that involves a question of penalty or lawalone” (s. 22(1)). [37] Mr. Algee asserts three errors of law in relation to having been found guilty.

He claims the Committee: (1)misapprehended the evidence, by finding a violation of the obligation to pay subconsultants “despite the fact that there were significantdiscrepancies in the evidence as to precisely what was owed to whom”; (2) mistakenly reversed the burden of proof, by finding Mr.Algee “failed to prove proper payment to sub-contractors”; and (3) misinterpreted By-law 14.6.15 by interpreting it as creating a trust.

[ 38 ] While there was some inconsistency in the evidence of the amounts due to subconsultants, and the Committee of Inquiry was unable to quantify the precise amounts due to each of them, a determination of the amount due was not a precondition to a finding that the By-law had been violated. The Committee was justifiably satisfied the evidence established that the subconsultants had not been promptly paid a considerable portion of the amounts they claimed to be unpaid and still owing. Indeed, Mr.

Algee acknowledged as much when he emphasized to the Committee that the Corporation continued to make payments on the accounts due to subconsultants. The finding that the subconsultants had not been paid promptly is not impaired by “ discrepancies in the evidence as to precisely what was owed to whom.” [ 39 ] The suggestion the Committee shifted the burden of proof, by requiring Mr. Algee or the Corporation to prove compliance with the By-law, is not supported by a reasonable reading of the Committee’s decision. Although the Committee’s reasons note Mr.

Algee did not present any evidence to indicate that amounts owed to subconsultants had been promptly paid, this is simply a recognition of the fact that he did not call evidence to contradict the clear and compelling evidence of non-payment or prompt payment, as contemplated by the By-law. Simply put, this challenge to the finding of guilt is grounded in a misinterpretation of the Committee’s decision. [ 40 ] Mr. Algee’s claim that the Committee erred by interpreting By-law 14.6.15 as creating a trust was a central focus of his submissions on appeal.

He maintains an architect has a debtor-creditor relationship with its subconsultants, as the architect has with all his creditors, and By-law 14.6.15 does not elevate this to a trustee-beneficiary, fiduciary relationship. The By-law does not require a separate “trust” account be maintained for fees due to subconsultants. Payments received by the Corporation from clients do not specify an allocation of the fees being paid, amongst the Corporation and its various subconsultants, nor do they come with the direction that any or specific subconsultants be paid.

In these circumstances, he argues, it is not possible to identify the property which is claimed to be the object of the trust nor can such property or funds be traced. [ 41 ] However, the Committee of Inquiry’s finding of guilt does not turn on this issue. Despite the Association asserting to the Committee that By-law 14.6.15 creates a trust, the Committee did not determine the issue. Further, the Committee did not make a factual determination that a trust was created for the benefit of subconsultants, as Mr. Algee claims in his submission to this Court.

T he Committee’s only express reference to the status of such funds in its decision on guilt was the comment (made in connection with its finding Mr. Algee’s guilty on “Count # 4”) that funds: received by [the Corporation] for payment to subconsultants are in effect held “in trust” for prompt payment to these subconsultants . Although testimony […] indicated some points of disagreement with Mr. Algee, there was no testimony placed in evidence suggesting that significant portions of monies owing to any subconsultants were being held by Mr.

Algee subject to some form of arbitration or further negotiations. [p. 8] [Emphasis added.] [ 42 ] This statement, that funds are “in effect” held in trust, does not reflect a determination of the Association’s claim or Mr. Algee’s contrary position. This is apparent from the decision as a whole, which does not otherwise address the issue. The statement is no more than a recognition by the Committee of the similarity between the duty imposed by the By-law and the restrictions on a trustee.

It seems clear to me the Committee considered, quite rightly in my view, that it was not necessary for it to decide the dispute between the Association and Mr. Algee on this issue in order to determine whether the By-law had been violated. [ 43 ] It is worth noting that on appeal not only does the Association maintain the Committee’s finding of guilt is not dependent on interpreting By-law 14.6.15 as creating a trust, but also, the Association further acknowledges that while the created obligation is similar to a trust, it does not create a trust.

Its Submission states that By-law 14.6.15: […] is analogous or similar to the statutory trust found in s. 3 of the Mechanics’ Lien Act but does not expressly create a trust . Instead By- Law 14.6.15 creates a positive duty for architects in this Province receiving monies from the owner of a project to pay those monies promptly to those subconsultants qualified to receive same. A trust is not necessary to find that an architect has violated By-Law 14.6.15 . [para. 5] [Emphasis added.] [ 44 ] In

summary, the Committee of Inquiry’s finding of guilt is not based on a finding the funds received from the Province were impressed with a trust; it was based on an application of the plain language of the By-law to the evidence. The Committee was satisfied the Corporation had failed to pay promptly since, after having been paid by the Province, its subconsultants continued to remain unpaid for extended periods of time, without any reason. The Committee was also satisfied the Corporation used such funds for its own purposes since, at times when the Corporation was unable to pay all creditors, it left subconsultants unpaid and made payments

to other creditors and to Mr. and Ms. Algee. There is no error in these determinations, let alone an error of law. B. Appeal against penalty and costs [ 45 ] Mr. Algee’s submissions regarding penalties and costs may be summarized as follows:

(1) Council failed to give reasons for its decision or gave reasons that are inadequate; and (2) in the alternative, Council (

a) erroneously accepted the Association’s position that By-law 14.6.15 creates a trust for subconsultants and (

b) misapprehended the findings of the Committee of Inquiry, leading to the imposition of excessive penalties, including, through an improper application of the ratio in Tomporowski v. Saskatchewan Assn. of Architects , [ 1994] S.J. No. 106 (Q.B.) (QL) . [ 46 ] The Association acknowledges Council had an obligation to provide reasons for its decision.

In fact, the Association explained to Council (in its “Pre-Sentencing Brief to the Council of the AANB”) that it should state the rationale for its decisions: Following receipt of written and oral submissions as to appropriate penalty in the Sentencing Hearing, the Council should retire to deliberate and to reduce to writing its decision on penalties and costs.

As per the case law and administrative law principles discussed in this Brief, the Council should state the rationale for its determinations to both penalty and costs . [para. 50] [Emphasis added.] [ 47 ] However, the Association maintains the reasons for Council’s decisions are evident from the minutes of its May 1 st meeting and, in any event, it submits the penalties and costs ordered are reasonable since they fall within a range of acceptable outcomes. [ 48 ] Mr. Algee disagrees the minutes may be relied upon as the Association contends.

He does not challenge their form or validity, nor does he suggest minutes cannot be utilized to evidence the reasons for a decision, or a part thereof. He maintains these minutes do not indicate Council’s reasons for its decision.

While they clearly indicate Council approved the Order issued (a copy was attached to the Minutes), they are otherwise so brief and imprecise they do not permit an understanding of the Council’s reasons; they are uninformative to the point they do not identify any of the disputed issues which Council had to address in order to arrive at a decision. [ 49 ] There is a significant difference between an absence of reasons for a decision and reasons that are insufficient. Where reasons are required and none are given, that alone will generally be enough to ground a successful appeal.

Where reasons are challenged on the basis they are inadequate or insufficient, more is required. In support of its claim the minutes permit an understanding why Council decided as it did, the Association cites the following comments of Justice Abella in Newfoundland and Labrador Nurse’s Union v.

Newfoundland and Labrador (Treasury Board) , 2011 SCC 62 , [2011] 3 S.C.R. 708: “[I]f the reasons allow the reviewing court to understand why the tribunal made its decision and permit it to determine whether the conclusion is within the range of acceptable outcomes, the Dunsmuir criteria are met” (para. 16). [ 50 ] The minutes, sparse as they are, express some rationale for some of Council’s decisions; however, they provide no insight into the rationale for others. An example of both is the paragraph which addresses costs.

It identifies why Council made its decision on costs, albeit briefly, but it also makes the bare statement that a fine of $1,000 is to be paid, without providing any context or rationale. This said, it is beyond dispute that every decision does not warrant the same level of attention or explanation. The entirety of the May 1 st minutes regarding penalties, publication and costs is as follows: 3.0 COUNCIL DISCUSSION During the discussion, Council noted that: • In the Pre-Sentencing Brief to Council by Mr. O’Brien and Mr. Blackier,

Part I – The

Summary of Facts;

Part II – Nature of Alleged Breaches by Algee and [the Corporation]; and

Part III –

Summary of COI Findings are not for dispute by Council.

• It is not the role of the association to impose a requirement for the defendant and his subconsultants to reach a settlement agreement as it pertains to unpaid fees referenced in this case and therefore the recommendation by the COI in this regard could not be supported by Council. • Based on the information provided, Council was unanimous in their opinion that this is a very serious issue and that the penalty should reflect the nature of the offence. • It was their unanimous opinion that the Council decision should be published.

As a self-regulating profession which is expected to be transparent specifically in the decisions of discipline and, has the authority to ensure its members conduct themselves ethically and to high standards, the Council decision should be published since it falls short of the conduct expected of Architects . • With respect to costs, Council agreed with the COI that 75% of the costs associated with this issue are directly attributable to the defendant and the fact that a guilty plea was only entered on one of the four charges resulted in a significant increase in legal costs.

It was further noted that a payment should be made prior to reinstatement as well as a $1,000 fine as permitted by our Act. • Council agreed with the COI on the issue of financial hardship which was placed on sub-consultants and not the defendant. At a time when subconsultants were not being paid monies earned, the defendant and Mrs.

Algee continued to draw significant funds from the company in payroll, dividends or draws. • As permitted by legislation, Council unanimously agreed suspension was warranted based on the evidence presented. • It was unanimously agreed that reinstatement be conditional on meeting the requirements of any Council Order. • It was important to note the facts of the case only and the evidence of hardship placed on others due to the business decisions of the defendant. Following a lengthy discussion, it was duly moved and seconded that Council approve the Council Order as presented (see attached).

Motion Unanimously Carried . [Amended Appeal Book, pp. 53-54] [ 51 ] It is difficult to disagree with Mr. Algee’s claim the minutes provide no explanation regarding Council’s decision on penalties; how they address costs is another matter, which I will elaborate upon later in these reasons. The minutes offer virtually no indication of Council’s reasons for the penalties imposed under s. 19(2). They do note that Council did not accept the Committee’s recommendation to require Mr.

Algee “reach a settlement agreement” with subconsultants because such “is not the role of the Association.” They also make two general statements, which provide some insight into Council’s reasoning: (1) the misconduct “is a very serious issue and that the penalty should reflect the nature of the offence”; and (2) the misconduct placed financial hardship on the subconsultants not Mr.

Algee, who “when subconsultants were not being paid monies earned, […] continued to draw significant funds from the company in payroll, dividends or draws.” [ 52 ] Although it is clear Council rejected the Committee of Inquiry’s recommendation on penalties and it adopted those advanced by the Association, the minutes do not indicate why Council decided to do so or how it addressed the live issues at the hearing, even when read in the context of the full record.

This becomes clear from a review of the issues that were contentious at the hearing before Council. [ 53 ] The record reveals the issues at the hearing were defined by the Association’s challenge to the recommendations made by the Committee. The Association’s written and oral submissions to Council asserted that the Committee’s recommendations were wrong and should not be implemented. It maintained that, instead, Council’s penalties should include a suspension of Mr. Algee, as it had unsuccessfully argued before the Committee.

The Association’s beginning submission to Council in furtherance of this position was that Council owed no deference to the Committee’s recommendations, as explained in its Pre-Sentencing

Brief: With all due respect to the members of the [Committee], it is respectfully submitted that the Council owes no duty of deference to the [Committee] relative to the penalties which should be imposed upon Algee and/or [the Corporation]. While the Council might be guided by the recommendations of the [Committee], the Council is under no legal or ethical duty to accept any or all of the recommendations of the [Committee] relative to penalties.

The Council is at liberty to exercise its unfettered discretion relative to penalties. [para. 21] [ 54 ] Before going further, I will pause to address the Association’s participation at the hearing. Although the Association’s role is not challenged on appeal, it is noteworthy because s. 19(2) of the Act does not contemplate the participation of the Association.

It provides that Council’s obligation, after receiving a report from a Committee of Inquiry, is to hear “submissions from the architect and the Committee of Inquiry with respect to imposition of penalty, if either should wish to make such submissions .” Yet, as is apparent, the Association effectively drove the hearing with its charge against the Committee’s recommendations and advancing, for a second time, a suspension of Mr. Algee.

Section 19(2) of the Act provides: 19(2) Upon receiving a report from the Committee of Inquiry pursuant to subsection (1) hereof, and upon hearing submissions from the architect and the Committee of Inquiry with respect to imposition of penalty , if either should wish to make such submissions , the Council may by order do one or more of the following: […] [Emphasis added.] 19(2) Sur réception du rapport du comité d’enquête fait en application du paragraphe (1) et ayant entendu, sur demande, les arguments de l’architecte en cause et du comité d’enquête quant [à] l’application d’une sanction , le Conseil peut ordonner l’une ou plusieurs des mesures suivantes : […] [Le soulignement est de moi.] [ 55 ] The Association assumed the role of prosecutor.

The Committee referred in its decision to the Association (or to the Association’s counsel) as the “prosecution”, as did the Association’s counsel. Perhaps this occurred because the Act does not provide for the appointment of counsel on a basis that is akin to an independent prosecutor. The Association, as a party, has been represented by counsel at the hearings before the Committee of Inquiry, the Council and this Court.

Presumably, it provided instructions to counsel from representatives other than the Committee or Council. [ 56 ] While s. 19(2) provides for the Committee of Inquiry to make submissions to Council, if it wishes, it is not obvious what submissions the Committee would make, in addition to those set out in its report. It is difficult to imagine that the Committee (or its legal counsel, if it had counsel) would make submissions against the recommendations made in its own report.

The Committee’s authority to appoint counsel is set out in s. 18 and the role of counsel would appear to be more limited than that of an independent prosecutor. It provides:

18(1) A Committee of Inquiry , when acting pursuant to this Part, shall conduct its proceedings in accordance with its own rules of procedure and may do all things and engage such persons including legal counsel as it deems necessary to provide for the investigation, hearing, and consideration of the complaint , and in no case is the Committee of Inquiry bound to follow the rules of evidence or procedure applicable in judicial proceedings except as hereinafter set out. […] 18(12) In any proceedings pursuant to this Part, the Committee of Inquiry may in its absolute discretion appoint legal counsel to lead the evidence tending to substantiate the complaint, and to advise the Committee on any relevant matter of law or procedure . [Emphasis added.] 18(1) Lorsque le Comité d’enquête agit sous le régime de la présente partie, il obéit à ses propres règles de procédure.

Il peut faire toute chose et retenir tout service juridique ou autre qu’il estime nécessaire pour mener l’enquête ou entendre et étudier la plainte .

Il n’est tenu en aucun cas de suivre les règles techniques de preuve ou de procédure applicables aux poursuites judiciaires, sauf dans la mesure ci-après indiquée. […] 18(12) Dans toute procédure régie par la présente partie, [le] comité d’enquête est entièrement libre de retenir les services d’avocats pour la présentation de la preuve à charge et pour obtenir [d’eux] des conseils pertinents en matière de droit et de procédure . [Le soulignement est de moi.] [ 57 ] In any event, despite s. 19(2) expressly providing for Council to hear from the architect and the Committee of Inquiry in relation to penalties, the matter of the Association’s appearance before Council to challenge the Committee’s report on penalties is not an issue before us. [ 58 ] Before returning to address the live issues before Council, I would note Council was required to accept the findings made by the Committee of Inquiry and the record before Council was limited.

It did not include the record that was before the Committee of Inquiry, such as the affidavits and the exhibits, which included the financial records of the Corporation. Nor does the record indicate Council had resort to transcripts of the viva voce evidence or submissions before the Committee. Council received the Committee’s decision dated January 2, 2018, on misconduct/guilt, and its report on penalty and cost recommendations, dated March 20, 2018. Council was also provided with the Association’s Pre-Sentencing Brief. It heard the oral submissions of the Association and Mr. and Ms. Algee.

The minutes begin with Council acknowledging that the Committee’s findings were not open “for dispute by Council”: In the Pre-Sentencing Brief to Council by Mr. O’Brien and Mr. Blackier,

Part I – The

Summary of Facts;

Part II – Nature of Alleged Breaches by Algee and [the Corporation]; and

Part III –

Summary of COI Findings are not for dispute by Council . [Emphasis added.]

(1) Penalties [ 59 ] As noted, the issues before Council flowed from the Association’s claim the Committee was wrong to recommend Minutes of Settlement be negotiated within 60 days and that Council should suspend Mr. Algee for three to six months. Mr. Algee opposed these positions. There is no doubt he preferred the recommendations of the Committee, although he argued the costs award was unreasonable. [ 60 ] The Association opposed the Committee’s recommendation to require Minutes of Settlement (pursuant to s. 19(2)(h)) for a number of reasons.

It submitted that the recommendation: (1) due to its restitutive thrust, shifted the focus away from the Association’s responsibility to discipline a member for misconduct; (2) gave the complaint and disciplinary proceedings the complexion of a collection process and involved the Association in the collection of debts; (3) sought to impose obligations on non-member third party subconsultants; and (4) was unfair to Mr. Algee since it could result in his being automatically suspended if he was unable to conclude an agreement with a subconsultant, through no fault of his own.

[ 61 ] As the Minutes indicate, Council concluded, it was “not the role” of the Association to order Mr. Algee to negotiate a settlement with subconsultants. It is not possible to know how or why Council came to this conclusion. The Association did not assert Council lacked the authority under s. 19(2)(

h) to make such an order; on the contrary, it acknowledged it had that authority. The Association argued restitution for subconsultants could shift the focus of disciplinary proceedings away from the greater duty to protect the public. Also, the mechanics of the order could cause difficulty for Mr. Algee and the Association. Non-compliance by Mr. Algee, despite his best efforts to comply, would result in his automatic suspension from practice.

The requirement to file the Minutes of Settlement with the Association (and for it to be advised on compliance) would unacceptably cause the Association and its staff to assume the role of monitoring and reporting on the Corporation’s compliance and progress. In the end, it is not clear if Council’s decision is grounded in the rationale that (1) it was “not the role” of the Association to be involved in any way in a restitutionary endeavour flowing from misconduct, even when it merely confirms what appears to have been almost an undertaking given by Mr.

Algee to continue to pay the subconsultants; or (2) it was “not the role” of the Association to monitor the Corporation’s compliance with the order because its staff had neither the capacity nor desire to do so. In

summary, in the absence of more from Council, an effort to determine its reasons for rejecting one position over another, is speculative at best. [ 62 ] In relation to the nature of the misconduct, the Association maintained before Council that By-law 14.6.15 creates a trust for subconsultants, as it had before the Committee.

This position and the Association’s characterization of an architect’s use of trust funds as a “conversion”, reflecting a use of property that beneficially belongs to the subconsultants, is summarized in its Pre- Sentencing Brief: It is submitted that this provision creates an obligation on architects to hold funds “in trust” for sub-consultants , and to pay those funds “promptly” and “on the basis of good business practice.” Converting funds held for sub-contractors to the architect’s own purposes, regardless of the underlying reasons, is a clear violation of this By-law. [para. 7] [Emphasis added.] [ 63 ] The Minutes do not indicate what Council decided in response to the Association’s claim.

Mr. Algee maintains that if Council accepted either the Association’s claim to Council, or the Committee’s finding that such amounts are “effectively” trust funds, Council’s assessment of the nature of the offence is tainted by error and it over-sentenced him.

Since Council gave no reasons that address the nature of the offence other than to note it as “serious”, it is not possible to know how Council responded to this issue. [ 64 ] Although the Association maintained the nature of the offence was a conversion of trust property, the Association did not rely on cases involving lawyers who had misappropriated trust funds, as it had before the Committee. Instead, in asserting that Council ought to order a three to six-month suspension, the Association relied on Tomporowski .

This case was put to Council as being the only reported decision in Canada involving an architect violating an obligation similar to By-law 14.6.15. [ 65 ] In Tomporowski , the court set aside, as too harsh, the decision to impose a three-month suspension (one for each of eight counts, to run concurrently) and the court-imposed penalties that did not include suspending Mr. Tomporowski; however, the Association argued Mr. Algee’s circumstances are different and his sentence ought to be more severe. It submitted Mr.

Algee’s failure to pay subconsultants promptly was the result of a clear intention to prefer himself, by the payment of salaries and other compensation, etc. (to both Mr. and Ms. Algee); it was not the result of a financial predicament or inability to pay due to circumstances beyond his control, as had been found to be the circumstances in Tomporowski .

The Association’s Pre-Sentencing Brief explained this distinction and its request for a more “stringent” penalty, as follows: In Tomporowski , the Court struck down the Council’s decision to impose a concurrent (as opposed to consecutive) three month suspension on each of eight (8) counts . The Court concluded that the architect in question had no intention to defraud or defeat the claims of his consultants.

The misconduct in question was not premised on devious conduct on the part of the architect . […] […] In addition, [the Corporation] unlike the circumstances in Tomporowski , did not suffer any cash flows challenges during the entire time period under review . Quite the opposite. The evidence supports a view that DTI was making regular payments to [the Corporation] and on a timely basis.

There is no serious argument to counter the proposition that the failure to remit monies to the consultants from [the Corporation] was the outcome of a conscious decision by Algee and his wife not to pay consultants on a timely basis for services previously rendered by the consultants .

The egregious mode of operating of Algee and his wife is enhanced when one considers that, Algee and his wife paid themselves from the bank account of [the Corporation] in excess of $1.1 million through [the Corporation]. It is particularly noteworthy that, during the period 2010 to November 2016, Mrs. Algee, who has no formal training/education as an architect and who, by her own admission, was able to only offer irregular assistance to the business affairs of [the Corporation], was paid in excess of $732,000 by way of salary. In

summary, Algee and his wife, acting on behalf of [the Corporation], simply chose NOT to pay consultants. Yet, Algee and his wife [had] NO reservations about paying themselves quite handsomely at all times during the period under review. The failure to pay consultants on a timely basis cannot be attributed to cash flow challenges within [the Corporation].

The real explanation for this outcome is simply a refusal on the part of Algee and [the Corporation] to satisfy, on a timely and proper basis, their legal, ethical and financial commitments to consultants, while they ensured that the personal financial interests and positions of Algee and his wife were unjust[tly] enriched at the expense of the consultants .

The motivations of Algee and his wife [vis-à-vis] the management of the business and affairs of [the Corporation] clearly and markedly distinguish this case from that of Tomporowski , and as such, require that the penalties imposed in this case be more stringent [than] the penalties imposed by the Court in [ Tomporowski ] . [paras. 31-36] [Emphasis added.] [ 66 ] On appeal, Mr. Algee submits it was both inaccurate and inflammatory for the Association to say he “simply chose NOT to pay consultants.

Yet, [he and his wife had] NO reservations about paying themselves quite handsomely at all times during the period under review.” [ 67 ] Whether Council accepted the Association’s characterization of Mr. Algee’s conduct as a basis for suspending him is unknown. While the minutes state that “[a]t a time when subconsultants were not being paid monies earned, the defendant and Mrs.

Algee continued to draw significant funds from the company in payroll, dividends or draws” it is not possible, particularly from this more neutral description of the facts, to know what Council decided or how it used this finding in its decision. [ 68 ] Moreover, it is not obvious how Council could accept the Association’s characterization based on the record. In relation to the facts surrounding Mr. Algee’s misconduct, Council had only the findings of the Committee in its decision and report. Those findings do not attribute to Mr. Algee the intent the Association attributes to Mr.

Algee in its submissions to Council, nor do they address in any meaningful way the financial circumstances of the Corporation or the compensation payable to Mr. and Ms. Algee during the relevant period. More will be said about this below. Given the limited findings of the Committee and the fact the Association’s characterization was disputed by Mr.

Algee, Council could not draw the inference the Association sought without supplementing the record to provide a factual basis for it to do so. [ 69 ] Before concluding a review of the live issues at the hearing before Council, I would note Council and the Committee of Inquiry were not directed to the same principles or factors in relation to sentencing of professionals for misconduct. As mentioned above, the Committee based its recommendations on a balancing of the factors referred to in Ogilvie , which had been listed in the Association’s brief to the Committee.

However, Council’s minutes do not mention the Ogilvie factors and it would appear they were not before Council. The Association’s submissions to Council did not refer to the Ogilvie factors; instead, they emphasized the Association’s public interest mandate and submitted Council should be guided by the principles of general deterrence, specific deterrence and rehabilitation.

Its brief summarized this: It is also respectfully submitted that the Council should be guided by the following principles relative to the imposition of penalties upon [the Corporation] and Algee: General deterrence…sending a message to the AANB membership and to the public that the conduct exhibited by Algee and [the Corporation] falls short of the conduct expected of architects; Specific deterrence…sending a message to both [the Corporation] and Algee that their conduct, as referenced in the allegations laid against them falls short of the conduct expected of architects, and, Rehabilitation of [the Corporation] and Algee…providing a basis upon which both [the Corporation] and Algee can learn from the

shortcoming in their conduct and take the necessary remedial steps to rectify said shortcoming and avoid a repetition of their actions. [para. 23] [ 70 ] The Association submitted a fine was necessary for specific deterrence and suggested that general deterrence, and the Association’s public interest mandate, supported a suspension from practice. Mr. Algee disputed that such penalties were necessary.

It is not apparent how Council responded to these positions; however, I note the similarity between the language in the Association’s brief and the minutes, which state that Council’s decision should be published since it “falls short of the conduct expected of Architects.” [ 71 ] Decisions by professional bodies on sanction are entitled to considerable deference. As was stated by Drapeau, C.J.N.B. (as he then was) for this Court in Allen : In Dr. Q. v.

College of Physicians and Surgeons of British Columbia , 2003 SCC 19 , [2003] 1 S.C.R. 226 , Chief Justice McLachlin confirmed great deference is owed by a reviewing court to a tribunal's selection of remedies or administrative responses: A statutory purpose that requires a tribunal to select from a range of remedial choices or administrative responses, is concerned with the protection of the public, engages policy issues, or involves the balancing of multiple sets of interests or considerations will demand greater deference from a reviewing court [...] [para. 31] Courts have only reluctantly interfered with the measures crafted by professional bodies as responses to objectionable conduct by their members.

In Bouhamdani v. Association of Professional Engineers and Geoscientists of New Brunswick , 2004 NBCA 84 , 276 N.B.R. (2d) 341 , Turnbull, J.A. identifies the rationale behind that reluctance: [...] courts are generally reluctant to vary any penalty imposed by a profession's discipline committee. Such judicial deference is derived from the legislated authorization of self-governance, and the consequent belief that the members of that profession, because of their particular expertise, are the best judges of the appropriate penalty for one of their peers. [para. 75] In Law Society of New Brunswick v.

Ryan , the Supreme Court of Canada ruled this Court should only intervene if the contested panel decision, determination or order “is shown to be unreasonable”. A disposition may be labelled “unreasonable” only if “no line of analysis within the given reasons [...] could reasonably lead the tribunal from the evidence before it to the conclusion at which it arrived.

If any of the reasons that are sufficient to support the conclusion are tenable in the sense that they can stand up to a somewhat probing examination, then the decision will not be unreasonable and a reviewing court must not interfere” (see Ryan , at paras. 42 and 55 ). In my view, this unmistakably exacting standard applies to all dispositions, including cost orders, prescribed by panels of the Discipline Committee. [paras. 30-32] [ 72 ] It is obvious the Association’s challenge to the Committee’s recommendations gave rise to a number of disputed and contentious issues before Council.

The path to a disposition required they be addressed. The minutes, in the context of the record before Council, do not elucidate Council’s rationale for its decisions on penalties nor do they demonstrate justification, transparency or intelligibility in its decision-making process. It is not enough to note the misconduct is serious and effectively choose the disposition advanced by one party over that of the other. In my opinion, based on the facts determined by the Committee of Inquiry, Council’s decision is not within the range of reasonable outcomes.

To be clear, a suspension is not necessarily beyond the range of reasonable outcomes for a violation of By-law 14.6.15; however, whether it is, will depend on the circumstances.

(2) Costs [ 73 ] Finally, I will briefly explain why I do not accept Mr. Algee’s claims regarding Council’s decision on costs. First, the minutes expressly indicate Council accepted the costs recommendation made by the Committee of Inquiry; like the Committee, it agreed the costs of the proceeding are attributable to Mr. Algee, and the guilty plea in relation to one of the charges did not decrease the Association’s costs. Second, in view of the record, it was unnecessary for Council to say more in order for its reasons to be apparent.

Before Council, the Association supported the Committee’s recommendation on costs and while Mr. Algee did not, his submissions did not raise any specific or meaningful basis for Council to make a different costs order. It must be remembered that guilt had been determined by the Committee and, absent exceptional circumstances, Council was likely to make some order of costs under s. 20 of the Act . His complaints about the magnitude of the order recommended by the Committee were general in nature and did not seriously challenge the Committee’s rationale for recommending the payment of 75% of costs incurred.

Perhaps it was in response to these

submissions that Council ordered the costs be taxed and the amounts due be paid in instalments. Even on appeal, Mr. Algee did not muster any specific argument against the reasonableness of Council’s costs order, apart from the substantial quantum of the order for what he notes were one two-day hearing and two one-day hearings. In my view the basis for Council’s order for costs is apparent and it, including the order for them to be taxed, is reasonable. C.

Imposition of penalty [ 74 ] While it is generally preferable for penalties to be determined by members of the profession, I would exercise the power conferred by s. 22(4) and make the order that Council could make. [ 75 ] Council’s penalty options are set out in s. 19(2):

[…] Council may by order do one or more of the following: (

a) reprimand such architect and, if considered proper, direct that the fact of the reprimand be recorded on the register; (

b) suspend the membership, license or Certificate of Practice of such person for such time as the Council considers proper, and direct that the reinstatement of such membership or license or Certificate on the termination of such suspension be subject to such conditions, if any, as the Council considers proper; (

c) direct that the membership or license or Certificate of Practice of such person be cancelled or revoked, and that the name of such person be removed from the appropriate register or registers; (

d) direct that the imposition of any penalty be suspended or postponed for such period and upon such terms as the Council deems proper, and that at the end of such period, and upon the compliance with such terms, that any penalty be remitted; (

e) direct that the decision of the Committee of Inquiry or Council be published in detail or in

summary in the official journal of the Association, or in such other manner or medium as the Council considers appropriated[sic] in any particular case; (

f) direct that the suspension, cancellation or revocation of membership, license or Certificate of Practice be advertised publicly in such manner as Council may determine; (

g) impose such fine as the Council may consider to be appropriate not exceeding $1,000.00 to be paid by the architect to the Association for use by the Association; (

h) make such other order as it considers just and fair in the circumstances. […] le Conseil peut ordonner l’une ou plusieurs des mesures suivantes : (

a) réprimander l’architecte et, s’il le juge à propos ordonner que ce fait soit inscrit au registre; (

b) suspendre la qualité de membre, le permis ou le certificat d’exercice de l’intéressé pour un délai jugé approprié, et ordonner que le rétablissement de la qualité de membre, du permis ou du certificat à la fin de la suspension soit assujetti aux conditions jugées à propos; (

c) ordonner l’annulation ou la révocation de la qualité de membre, du permis ou du certificat professionnel de l’intéressé et la radiation de son nom des registres pertinents; (

d) ordonner que l’application de toute sanction soit suspendue ou différée pour une durée et aux conditions jugées appropriées, et qu’à l’échéance de ce délai, si les conditions ont été respectées, la sanction soit levée; (

e) ordonner la publication de sa décision ou de celle du comité d’enquête, de manière détaillée ou

sommaire, dans l’organe officiel de l’Association, dans un autre média ou de quelque autre manière jugée appropriée en l’espèce; (

f) ordonner que la suspension, l’annulation ou la révocation de la qualité de membre, du permis ou du certificat d’exercice soit annoncée publiquement de la manière qu’il décide; (

g) imposer une amende jugée appropriée, d’au plus 1000$, que l’architecte sera condamné à payer à l’Association à l’usage de celle-ci; (

h) ordonner toute autre mesure qu’il estime juste et équitable dans les circonstances.

[ 76 ] Relevant to the imposition of penalties under s. 19(2) are the objectives of general and specific deterrence and rehabilitation, as well as the factors identified in Ogilvie . It goes without saying a self-governing professional body like the Association has a public interest mandate. [ 77 ] There is no issue taken with Mr. Algee’s professional ability and reputation, and the findings in this case represent a first offence. The Association advised Council Mr.

Algee “has done his bit for students over the years,” his community involvement has been strong, he was very cooperative throughout the complaints process and he did not try to delay, stall or hinder their prosecution. [ 78 ] As to the nature of the misconduct flowing from a violation of the obligation to pay subconsultants, it is not necessary to determine whether By-law 14.6.15 impresses the funds received with a trust for the benefit of subconsultants. This is not in issue on appeal.

The Association acknowledges the By-law does not create an express trust, as does, for example, the Mechanics’ Lien Act , R.S.N.B. 1973, c. M-6 , which provides “[a]ll sums received by a builder […] on account of the contract price are and constitute a trust fund in the hands of the builder […] for the benefit of […]” ( s. 3 ). [ 79 ] This said, By-law 14.6.15 imposes obligations that have similarities to those owed by a trustee. The obligations are clear: an architect who receives funds for services provided by subconsultants and suppliers is required to pay them promptly and to not use them as his or her own.

The similarity was noted i n Tomporowsk i where the court observed that funds under such an obligation are in the nature of trust funds. This is not diminished by the fact the court did so in the context of deciding whether the architect had failed to “conduct his relationship with clients, contractors, suppliers, engineers, consultants and other architects in an ethical and professional manner” (para. 27).

The by-laws in Tomporowski did not contain an express obligation to pay subconsultants in a manner similar to By-law 14.6.15. [ 80 ] In short, like the Committee of Inquiry and Council, I view the violation of By-law 14.6.15 as a serious matter. Also, I agree with the Committee and Council that the victims of the misconduct are the subconsultants, not Mr. Algee. The significant amounts owed to subconsultants, for extended periods of time, is also a factor in this assessment. [ 81 ] However, I am unable to accept the Association’s claim that the conduct of Mr.

Algee is “egregious” to the point of making it distinguishable from the professional misconduct in Tomporowski . In that case, the architect did not pay subconsultants, even though he had been paid in full by the owners. He operated a substantial firm until 1991 when delays in projects and a slowdown in the economy impacted his cash flow. In early 1992, he tried to negotiate payment arrangements with his subconsultants, but he was unsuccessful. In June he ceased operations and set up a new company under which he intended to complete his current projects.

The court was satisfied the architect “had no intention to defraud or defeat the claims of his consultants, nor did he act in any underhanded manner” (para. 14). Specifically, in relation to sentencing, the court said the following about the conduct of the architect: I have already concluded that the appellant’s plight arose not because of any fraudulent or planned action, but because of poor judgment in the manner in which he handled his financial matters. [para. 35] [Emphasis added.] [ 82 ] In contrast to these findings regarding Mr. Tomporowski, the Association summarized Mr.

Algee’s conduct to Council as follows: In

summary, Algee and his wife, acting on behalf of [the Corporation], simply chose NOT to pay consultants. Yet, Algee and his wife [had] NO reservations about paying themselves quite handsomely at all times during the period under review. The failure to pay consultants on a timely basis cannot be attributed to cash flow challenge s within [the Corporation].

The real explanation for this outcome is simply a refusal on the part of Algee and [the Corporation] to satisfy, on a timely and proper basis, their legal, ethical and financial commitments to consultants, while they ensured that the personal financial interests and positions of Algee and his wife were unjust[ly] enriched at the expense of the consultants. [ 83 ] The Association does not suggest fraud or underhanded conduct

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