Sturt v Chartered Professional Accountants of Alberta, 2023 ABKB 299

Court of King’s Bench of Alberta Citation: Sturt v Chartered Professional Accountants of Alberta, 2023 ABKB 299 Date: 20230518 Docket: 2103 14281 Registry: Edmonton Between: Paul Sturt Applicant - and - Chartered Professional Accountants of Alberta Respondent _______________________________________________________ Reasons for Decision of the Honourable Justice Peter Michalyshyn _______________________________________________________ Introduction [ 1 ] This is a further application by Paul Sturt in which he alleges rights violations by the Respondent Chartered Professional Accountants of Alberta (“CPA Alberta”) that should result in the remedy of a stay or interim injunction.

For reasons which follow the application is dismissed.

Background [ 2 ] Mr. Sturt first applied on July 20, 2021 (“the First Application”) for the remedy of, amongst other things, a permanent injunction or alternatively, a stay or temporary injunction preventing CPA Alberta from proceeding with a disciplinary hearing regarding him. [ 3 ] In reasons filed November 30 2022, I dismissed Mr. Sturt’s First Application: Sturt v Chartered Professional Accountants of Alberta , 2022 ABKB 801 .. The background to the First Application was set out as follows (at paras 2-5): [2] For some 12 years ending in mid-2018 Mr. Sturt was a registered member of CPA Alberta.

In April 2019 CPA Alberta received a complaint from Deloitte LLP raising serious allegations of professional misconduct against Mr. Sturt during a number of years he was a registered CPA Alberta member. In December 2019 Mr. Sturt provided CPA Alberta with an “interim voluntary restriction”. In the meantime, CPA Alberta continued its investigation into the April 2019 complaint. An investigation report of November 27 2020, resulted. On January 5, 2021 Mr.

Sturt was advised that the Complaints Inquiry Committee (CIC) of CPA Alberta concluded that the evidence warranted referring the matter to a hearing. [3] Earlier in the spring, 2019, Mr. Sturt’s former employer filed a complaint against Mr. Sturt with the RCMP. The Respondent has filed no such complaint. Nor has Deloitte LLP. [4] Notwithstanding the passage of three years leading to the hearing of this application in 2022, there is no evidence of any criminal charge against Mr. Sturt. Nor is there evidence Mr. Sturt has ever been contacted or questioned by the RCMP. Mr.

Sturt has made no inquiries of the RCMP for the existence or status of any investigation. [emphasis added] [5] Mr. Sturt now applies for an order granting a stay or injunction enjoining the Respondent from proceeding with the discipline hearing. He seeks other relief in the alternative. The detailed basis for the sought-after relief will be discussed further as these reasons unfold. [ 4 ] Subsequent to the First Application, Mr. Sturt inquired of the RCMP whether any investigation of him was ongoing. As noted, he had chosen to make no earlier inquiries. [ 5 ] Mr.

Sturt has deposed that his choice in that regard was informed by the advice of his counsel, by his apprehension an inquiry might be seen as “interfering in the RCMP’s investigative process”, and indeed by a concern an inquiry might “revive the RCMP’s interest in laying criminal charges” against him (Mr. Sturt’s affidavit filed March 13, 2023, paras 5-10). Mr. Sturt confirmed that no other factors influenced his decision to avoid inquiries of RCMP prior to the First Application (Questioning on affidavit, April 3, 2023). [ 6 ] It was only after the November 30, 2022 decision that Mr.

Sturt reconsidered his position. He concluded he had no option but to contact RCMP about the status of its investigation. [ 7 ] Through counsel Mr. Sturt inquired of RCMP by letter dated January 30, 2023. The letter asked of the status of an ongoing investigation, if any. If the investigation was ongoing, the letter asked further how “Mr. Sturt [can] assist in terms of providing information so that the investigator would then have all relevant information (“both sides of the story”)”. [ 8 ] The RCMP lead investigator of Mr. Sturt’s case responded on February 2, 2023.

The response confirms that RCMP had an open file and was maintaining an “ongoing fraud/theft investigation by RCMP into allegations surrounding Mr. Sturt while employed by Thompson Bros (Constr. Ltd)”. The response further invited Mr. Sturt “to tell his side of the story” to RCMP “under police warning/caution”. [ 9 ] At least by the time of the within application (“the Second Application”), Mr. Sturt had not accepted the RCMP invitation to tell his side of the story. [ 10 ] In his March 13, 2023 affidavit Mr.

Sturt deposed that he believed the RCMP were awaiting the outcome of the CPA Alberta hearing in order to further assist the RCMP in their ongoing investigation against him. Mr. Sturt provided no basis for this belief. I find it is speculation and entitled to no weight. [ 11 ] Mr. Sturt filed an appeal of aspects of the decision in the First Application on December 21, 2022. [ 12 ] The new evidence – that is to say, the above-noted exchange of correspondence to and from the RCMP – existed before Mr. Sturt’s deadline under Rule 14.45 of the Alberta Rules of Court to apply to admit new evidence in the appeal.

No application was brought to admit the RCMP correspondence as new evidence in the appeal. [ 13 ] As the appeal unfolded – and indeed with the date for the appeal having been set for May 1, 2023 – Mr. Sturt also gave notice to the Court of King’s Bench that he intended to bring a fresh application based on the new RCMP evidence. The notice first came to my attention in correspondence of February 15, 2023.

On February 16, 2023 CPA Alberta corresponded in turn that a fresh application, if substantially the same as the First Application except based on the new evidence, would be opposed on the basis it was an abuse of process. In due course Mr. Sturt filed his fresh application, on March 17, 2023. What followed was a March 23, 2023 Consent Order setting out steps leading to the May 11, 2023 Second Application.

CPA Alberta filed a cross-application on April 24, 2023 seeking a finding that the Second Application was an abuse of process, and an award of solicitor/client costs. [ 14 ] The appeal was argued May 1, 2023 and dismissed: Sturt v Chartered Professional Accountants of Alberta , 2023 ABCA 146 .

Analysis Abuse of process/res judicata [15] CPA Alberta’s abuse of process cross-application was heard ahead of the Mr. Sturt’s Second Application. I reserved on bothapplications until the filing of these reasons. [16] CPA Alberta says the abuse of process arises owing to what it calls a procedural irregularity, and the doctrine of res judicata.(Arguments based on functus officio, and collateral attack were advanced in CPA Alberta’s Brief filed May 2, 2023, but not arguedorally.) [17] The alleged procedural irregularity arises from Mr. Sturt’s decision not to seek to admit the new RCMP evidence in theappeal.

CPA Alberta argues that to raise the same new evidence now in the Second Application undermines the appeal process andcreates an unnecessary duplication of court proceedings and party resources. [18] Mr.

Sturt says the decision to bring the new evidence forward only in the context of the Second Application was a “reasonablestrategic choice” that should not come back to haunt him in a finding of abuse of process. [19] Counsel agree there are no authorities directly on point, and none have come to my attention. [20] I am not persuaded, in the circumstances of this case, that I should find an abuse of process in these King’s Bench proceedingsarising from counsel’s decision to use of the new evidence in the Second Application, yet not seek to use the same new evidence in theCourt of Appeal. [21] I come to a different conclusion regarding the issue of res judicata – and here, of the issue estoppel variety. [22] The test of issue-estoppel res judicata is stated in Thai v Kernick, 2021 ABCA 236 at para 21: [21] For the discretion as to issue estoppel to be available, three factors are considered: (1) the same question has been, expressly orimplicitly, decided, or the moving party could have with due diligence put the question to the prior competent tribunal; (2) the judicialdecision which is said to create the estoppel can be characterized as final; and, (3) the parties to the judicial decision or their privies werethe same persons as the parties to the proceedings in which the estoppel is raised or their privies”: compare Danyluk, para 25. [23] I agree with CPA Alberta that Mr.

Sturt unquestionably could have through the exercise of due diligence in the FirstApplication produced the very same evidence and arguments arising from it that are the substance of the Second Application. The otherelements of the test for issue estoppel are met too, in that the First Application was a final decision, and involved the same parties. [24] I agree to that the authority of Hill v Hill, 2016 ABCA 49 (Reasons for Judgment Reserved, leave to appeal refused (SCC)), is a full answer on the question of res judicata.

I find no uncertainty or inconsistency in the law as stated in Hill, assuggested by counsel for Mr. Sturt. [25] Hill was a case in which a party sought to adduce new evidence calling into question an earlier final decision. The courtconfirmed a narrow discretion to allow actions to proceed, for example on the basis of new evidence, if to do otherwise in thecircumstances would result in a “substantial miscarriage of justice” (at para 28).

Further with regard to new evidence, it must have beenunavailable at trial, and it must have been capable of impeaching the result of the case – it “must [have been] so material that it wouldhave changed the result had it been adduced at trial” (at paras 29-30). Again as persuasively argued by CPA Alberta, the court in Hillemphasizes the point as follows (at paras 41-42): [41] When the substantive requirement of the various formulations is examined, the following emerges: there is only one test, it is astringent one, and properly so.

To override the imperative of finality, it must be demonstrated that the evidentiary foundation of theoriginal judgment is most likely wrong and that the new evidence would have changed the result had it been adduced at trial. It is not aquestion of whether the new evidence, alone or along with other evidence, might have had some impact on the outcome. The evidencemust be incontrovertible and must conclusively impeach the original result. [emphasis added] [42] This high standard indicates the rarity of a circumstance in which new evidence alone will constitute an exception to resjudicata.

It is even more rare when a final judgment is sought to be set aside. The respondent has not brought to this Court’s attention asingle Alberta case where a final judgment has been set aside on the basis of new evidence alone. In fact, there appear to be very fewinstances in which this jurisdiction has been exercised in Canada… [26] I agree that the new evidence in Mr. Sturt’s Second Application is not new in the sense it was unavailable before the FirstApplication; it was unavailable only because Mr. Sturt chose tactically not to make it available. [27] As noted in CPA Alberta’s brief, Mr.

Sturt “deliberately refrained from making the necessary inquiries”. While Mr. Sturt hasgiven his reasons for that deliberate choice, in my view those reasons do not overcome the due diligence requirement in the authorities. Itmakes no sense that Mr. Sturt refrained from inquiring because he did not want to be seen as interfering with the RCMP’s investigativeprocess. And it makes no difference that Mr. Sturt accepted the advice of counsel to refrain from inquiring, or that an inquiry might haverevived the RCMP’s interest in laying criminal charges. It was only after the failed First Application that Mr.

Sturt overcame hisreluctance and anxiety and instructed counsel to inquire of the RCMP. The ease with which this inquiry was made, and answered, is thevery definition of a failure to exercise due diligence in bringing the evidence forward at the appropriate time. [28] Further, I agree with CPA Alberta that the new evidence is determinative of nothing material to the Second Application. Itdetermines that the RCMP have an open file, nothing more. It is no evidence of a criminal prosecution, or that Mr. Sturt is charged with a

criminal offence, or will ever be, or if ever, when. The new evidence also reveals nothing, directly or by inference, with regard to thetiming or nature of the ongoing investigation. It adds nothing to the question of whether an RCMP investigation will or can or shouldsupplant CPA Alberta’s statutory obligation to inquire itself into Mr. Sturt’s alleged misconduct, in a timely fashion and in the publicinterest. [29] For these reasons, the cross-application based on res judicata is allowed.

Stay of proceedings/interim injunction [30] If I am wrong with regard to res judicata, I would dismiss the Second Application for a stay or alternatively an interiminjunction. [31] As noted in my earlier decision, it is not in dispute that the law for both a stay of proceedings and interim injunction stemsfrom RJR-MacDonald v Canada (Attorney-General), (SCC) and its three-part test:

a) Is there a serious issue to be tried?

b) Would the applicant for the injunction suffer irreparable harm if the injunction were not granted?

c) Is the balance of convenience in favour of granting the interlocutory injunction or denying it? Is there a serious issue to be tried? [32] In the First Application, I found no serious issue to be tried on any of the grounds raised, even coming out of a generousreading of Yee v Chartered Professional Accountants of Alberta, 2020 ABCA 98. That reading took into account the evidence of noparallel proceedings, amongst other things. As noted above in the context of the res judicata application, the Mr. Sturt’s new evidenceadds nothing material to these considerations. [33] Mr.

Sturt relies on College of Physicians and Surgeons of Ontario v Sazant, 2012 ONCA 727 and Misra v College ofPhysicians & Surgeons (Saskatchewan), (SK CA), [1988] 5 WWR 333. Both cases are distinguishable and of limitedassistance in that both dealt with individuals involved in actual criminal proceedings. [34] For reasons given under the heading of res judicata, I reject that Mr. Sturt’s new evidence reveals anything about the timingand nature of the investigation for which RCMP maintain an open file. Mr. Sturt continues to be an individual not charged with anycriminal offence.

With the new evidence squarely before me, I again reject Mr. Sturt’s arguments that it would be impractical and unfairand prejudicial to him to allow the CPA Alberta proceedings to unfold. I find there continues to be no serious issue to be tried. [35] I also found no serious issue to be tried on procedural fairness grounds, based in part on prematurity, and in part on the merits.Mr. Sturt’s new evidence is not material to either of these conclusions. Accordingly, I find on this basis as well that there is no seriousissue to be tried.

Would the applicant for the injunction suffer irreparable harm if the injunction were not granted? [36] In the First Application I found no irreparable harm. Mr. Sturt’s new evidence does not change that conclusion. Is the balance of convenience in favour of granting the interlocutory injunction or denying it? [37] In the First Application I found that the public interest of allowing CPA Alberta’s investigation and adjudication processes tounfold in a timely manner far outweighed the unmeritorious grounds Mr. Sturt had advanced to stay or abeyance the disciplineproceedings on an interlocutory basis. Mr.

Sturt’s new evidence is immaterial to that conclusion. [38] Mr. Sturt relies on the decision in the First Application and in particular subparagraph 43(e), which discusses Law Society ofSaskatchewan v Abrametz, 2022 SCC 29, and that part of it that suggests: …exceptional circumstances may include a stay based on the presence of related criminal proceedings. Such proceedings may indeedjustify a stay, and a lengthy one.

But as noted elsewhere in these reasons, this Abrametz exception to the general rule does not assist Mr.Sturt as he does not face criminal proceedings, nor is there is evidence that such proceedings are on the horizon. [39] Again, for reasons already stated, Mr. Sturt’s new evidence is immaterial to this conclusion. The balance of conveniencecontinues to favour denying the application for a stay or interim injunction. Conclusion [40] For the reasons stated, the cross-application is allowed and, in the alternative, the Second Application is dismissed. [41] If they cannot agree, the parties may speak to costs.

Heard on the 11th day of May, 2023.

Dated at the City of Edmonton, Alberta this 18 th day of May, 2023. Peter Michalyshyn J.C.K.B.A. Appearances: Richard J. Cotter, KC and Kurtis P. Letwin Dentons Canada LLP for the Applicant Paul Sturt Fred Kozak, KC and Michael E. Swanberg Reynolds Mirth Richards & Farmer LLP for the Respondent Chartered Professional Accountants of Alberta