Gerald Kirby Appellant And: Association of Chartered professional Accountants of Newfoundland v. Labrador, 2021 NLSC 159

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Kirby v. Association of Chartered Professional Accountants of Newfoundland and Labrador, 2021 NLSC 159 Date : November 30, 2021 Docket : 202101G4574 and 202101G4576 Between: Gerald Kirby Appellant And: Association of Chartered professional Accountants of Newfoundland and Labrador Respondent Before: Justice Daniel M. Boone Edited Transcript of Oral Judgment Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: November 29, 2021 Date of Oral Judgment: November 30, 2021

Summary: The Applicant applied for an order staying Orders of an Adjudicative Tribunal of the Association of Chartered Professional Accountants. The Court determined that the Chartered Professional Accountants and Public Accountants Act granted the Court a discretion to order a stay of a tribunal decision pending appeal, but that the conditions for ordering a stay were not established in this case. Appearances:

David P. Goodland, Q.C. Appearing on behalf of the Appellant Augustine F. Bruce, Q.C. Appearing on behalf of the Respondent Authorities Cited: CASES CONSIDERED: Shea v. The Law Society of Newfoundland and Labrador , 2020 NLSC 91 ; Rees v. Royal Canadian Mounted Police , 2005 NLCA 4 ; Weir’s Construction Ltd. v. Warford Estate , 2016 NLCA 65 STATUTES CONSIDERED: Chartered Professional Accountants and Public Accountants Act, S.N.L. 2014 c. C-10.1 ; Law Society Act, 1999 , S.N.L. 1999, c. L-9.1 RULES CONSIDERED: Rules of the Supreme Court, 1986 , S.N.L. 1986, c. 42, Sched.

D REASONS FOR JUDGMENT Boone, J. : INTRODUCTION [ 1 ] The Applicant is a member of the Association of Chartered Professional Accountants of Newfoundland and Labrador. He was the subject of several complaints of professional misconduct that were made by a former client. He was found guilty of conduct deserving of sanction on 15 charges. [ 2 ] The Applicant appealed the finding of guilt in 6 of those 15 charges.

There are two separate appeals but they will be heard together by this Court in February 2022. [ 3 ] The sanctions ordered against the Applicant after one hearing included an 18-month suspension of his license as a public accountant, a fine and an order for costs; after the other hearing the penalties included a revocation of his certificate to practice as a chartered accountant, costs orders and fines. Both orders provided that a

summary of the findings and sanctions be published in accordance with s. 37 of the Chartered Professional Accountants and Public Accountants Act . [ 4 ] The Applicant now applies for a stay of the orders for sanction and publication pending the appeals. [ 5 ] The Applicant’s license to practice as a public accountant has been suspended by order of the Association’s Complaints Authorization Committee since September 2018.

Notice of that suspension was published in accordance with s. 31(4) of the Act . [ 6 ] The Act in s. 10 distinguishes between the certification as a chartered professional accountant and a license as a public accountant. Each designation allows the holder to perform different services. The designation of public accountant is a historical one and is not meant to suggest that only public accountants provide services to the public. A chartered professional accountant can provide services to the public. [ 7 ] I have decided that the application for a stay pending appeal should be dismissed for the following reasons.

ANALYSIS The Chartered Professional Accountants and Public Accountants Act [ 8 ] The Act provides that the filing of an appeal does not automatically stay an Order of a tribunal: 43(1) The association or the respondent may, within 30 days after receiving notice of the decision or order of an adjudication tribunal under this Act , appeal the decision or order to the Trial Division by filing a notice of appeal with the court. 43(2) An appeal under this

section does not stay the decision or order being appealed unless the Trial Division orders otherwise. [ 9 ] As to the specific order for publication, the Association says that it is required to publish a

summary of the decision of the Adjudication Tribunal. This obligation is found in the Chartered Professional Accountants and Public Accountants Act, S.N.L. 2014 c. C-10.1 (the “ Act ”), s. 37(3) , which provides as follows:

37(3) The registrar shall publish a

summary of a decision or order of an adjudication tribunal in a newspaper of general circulation in or nearest to the community in which the respondent practises within 14 days of the expiry of the appeal period under

section 43 , unless a court orders otherwise, where the decision or order (

a) suspends the respondent; (

b) allows or directs the respondent to surrender either or both of his or her certificate or licence issued under this Act ; (

c) restricts the respondent's practice; (

d) specifies conditions for the continuing practice of the respondent; or (

e) requires that a

summary of the decision or order be published. [ 10 ] The parties agree that the wording of s. 37(3) of the Act is in the same terms as the equivalent provisions of the Law Society Act, 1999 , S.N.L. 1999, c. L-9.1 that I considered in the case of Shea v.

The Law Society of Newfoundland and Labrador , 2020 NLSC 9 . [ 11 ] Therefore, the following conclusions apply: • The Act does not provide for an automatic stay on appeal of the Order of the Association disciplinary Tribunal; • The Court has a discretion to order a stay of the Order pending appeal; • The discretion ought to be exercised on consideration of the familiar factors of whether there is a serious issue to be tried, whether either side will suffer irreparable harm depending on the decision on the stay and the balance of inconvenience from such harm.

Issues [ 12 ] Therefore, the following issues must be decided: 1. Does the Appeal raise a serious issue? 2. Will the Applicant suffer irreparable harm if the Orders of the Tribunal are not stayed? 3. Will the Association suffer irreparable harm if the Orders are stayed? 4. What is the balance of inconvenience? The Test for a Stay Pending Appeal [ 13 ] The Court of Appeal in Rees v.

Royal Canadian Mounted Police , 2005 NLCA 4 , directed that a judge of this Court in deciding whether to exercise discretion to order a stay pending an appeal from a statutory tribunal should apply the same test as in deciding whether to grant an interlocutory injunction: • First, a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried; • Second, it must be determined whether the applicant would suffer irreparable harm if the application were refused; • Finally, an assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits. .

Serious Issue [ 14 ] As stated by the Court of Appeal in Weir’s Construction Ltd. v. Warford Estate , 2016 NLCA 65 , at para. 16 : “The first prong of the test is whether there is a serious issue to be argued on appeal. This requires a preliminary, but not a detailed or extensive, investigation of the merits of the appeal to ascertain whether the appeal is frivolous or vexatious.” [ 15 ] The Applicant raises several arguments in support of his appeals.

In his first appeal, he argues that the Tribunal erred in the assessment of the credibility of the complainant and also erred in its conclusion regarding whether the services that the Applicant provided to the complainant were within the scope of accountancy. In his second appeal, he argues that the Tribunal made errors in its conclusions of fact and also that it denied him procedural fairness in respect of the timing of a decision on the admissibility of evidence.

He appeals the sanctions ordered in both Tribunal decisions, which he says were more severe than justified. [ 16 ] The Applicant acknowledges that his appeals from factual findings will be reviewed on the relatively high standard that requires that he show palpable and overriding error by the Tribunal. The Tribunal already heard the arguments that he now makes on appeal, especially regarding credibility issues. However, the Applicant relies on documentary evidence and allegedly starkly inconsistent statements of the complainant in support of his arguments.

It cannot be said that his arguments are frivolous or without any chance of success. [ 17 ] As to the question of the Tribunal conclusions on the scope of services that the Applicant performed for the complainant, both parties were in agreement that the standard of appellate review to be applied to consider that ground of appeal will be determined on the basis that it raises a question of mixed law and fact.

However, neither party was willing to commit at this stage to a position whether it would lie on the spectrum closer to a question of law, attracting a standard of correctness, or a question of fact to which the higher

standard of palpable and overriding error would be applied. Neither party provided any authority at this stage on the question whether the appeal on that ground would consider the expertise of the Tribunal as a factor suggesting that the Court should show particular deference to the Tribunal. Nevertheless, it certainly cannot be said that the Applicant’s appeal is not a serious one.

He maintains that the documentary record will show that he was not acting as an accountant but rather as an entrepreneur or business advisor when he engaged in the conduct that led to his discipline. [ 18 ] The question of procedural fairness raised by the Applicant in respect of the second tribunal decision is one that will attract review on a standard of correctness. The Applicant argues that the Tribunal put him in an unfair procedural position because it refused to rule on an evidentiary objection until after he had already decided on the evidence he would call in the hearing.

His appeal in that regard may not succeed, but certainly cannot be said to be frivolous. [ 19 ] Applying the low standard required at this stage, a preliminary review of the Applicant’s appeal leads to the conclusion that it raises serious issues to be heard. Irreparable Harm [ 20 ] The Orders of the Tribunal require that the Applicant’s license as a public accountant be suspended, that he surrender his certificate as a chartered accountant, that he pay monetary sanctions in the form of $212,000 in costs and $35,000 in fines, and that the Association publish notice and a

summary of its findings. [ 21 ] The parties are in agreement that I can exercise my discretion to stay all or part of the Orders.

Consequently, the question of irreparable harm ought to be considered separately in respect of each of the consequences of the Orders. [ 22 ] The suspension of the Applicant’s license as a public accountant will not cause him any harm because his license is currently under suspension since September 2018 by a decision of the Association’s Complaints Authorization Committee. [ 23 ] The Applicant has demonstrated that the requirement that he surrender his certificate as a chartered accountant will cause him harm. According to the evidence, he earns money through the provision of chartered accountancy services.

His earnings from that source will be lost if he is required to surrender his certificate. [ 24 ] I am not convinced that the financial consequences for the Applicant if I decline to stay the costs and fines sanctions constitute irreparable harm. If the Applicant pays those sanctions and is successful in his appeals, then there is no doubt that the Association will be in a position to repay the money to him. The Applicant argues that he may not be able to pay the financial sanctions and that this might result in his having to claim bankruptcy. This is too speculative to constitute evidence of irreparable harm.

Moreover, if he does not pay the financial sanctions, then the process of collection by the Association is unlikely to be concluded before the Appeals are heard and determined. The costs award must be enforced through civil action before it can be collected; the fines must first be registered as an order of this Court and can be collected through enforcement measures more quickly but the fines amount to only $35,000 and collection would not result in the dire consequences on which the Applicant relies. [ 25 ] The Association concedes that the publication of the

summary of the Tribunal’s serious findings, along with notice of the sanction of the permanent loss of the ability to practice, will cause the Applicant significant reputational harm.

This harm would not be fully repaired by a successful appeal, even followed by a publication of the results of that appeal, which would be required under s. 37(5) of the Act . [ 26 ] Therefore, the Applicant has demonstrated that he will suffer irreparable harm unless the Order requiring the surrender of his certificate as a chartered accountant and the Order for publication are stayed. [ 27 ] The Association says that the public interest will suffer irreparable harm if the Applicant is allowed to continue to practice as a chartered accountant despite the findings of the Tribunal and if the decision of the Tribunal is not published.

The Association notes that the Applicant has continued to practice as a chartered accountant since the date of its decision. Balance of Convenience [ 28 ] The primary purpose of statutes providing for self-regulating professions is to protect the public through the adoption and enforcement, by way of discipline and admission procedures, of standards of professional conduct. [ 29 ] Therefore, assessing the balance of inconvenience in this case is not a question of assessing the relative inconvenience to two private litigants of granting or refusing a stay pending appeal.

Rather, the irreparable harm that I have found will occur to the Applicant if a stay is refused must be weighed against the harm that will occur to the public interest if a stay is granted. [ 30 ] I am mindful that the legislature has already chosen how that balancing exercise ought to be resolved in most cases by not providing for an automatic stay on the filing of an appeal. The legislature has obviously decided that reputational or financial harm to a disciplined accountant, even in the event of a successful appeal, is secondary to the goal of public protection.

In most circumstances where this Court is considering a stay pending appeal, the balance of convenience will match with that policy choice by the legislature. A stay should only be granted in exceptional circumstances. [ 31 ] I am not satisfied that the Applicant has demonstrated that his case is exceptional. The loss of accountancy income and the reputational harm that he will incur are the inevitable consequences of the findings of the Tribunal.

There is nothing in the circumstances of his case that distinguishes it from the case of any other professional who appeals from a decision revoking their right to practice. Unlike the circumstance in Shea v. The Law Society , public protection is very much a concern in this case. If a stay is granted, then the Applicant will continue to provide chartered accountancy services to a public that will be unaware that a tribunal of the association governing his profession has found him guilty of unprofessional conduct and imposed the most severe sanction against him.

The Applicant’s private interest in avoiding reputational or financial harm does not outweigh the public interest.

Conclusion and Disposition [ 32 ] The Application for a stay of the Orders of the adjudication tribunal is dismissed. [ 33 ] The costs of this Application will be costs in the cause of the Appeals. _____________________________ Daniel M. Boone Justice