Michael Power APPELLANT And: Association of Chartered Professional Accountants of Newfoundland v. Labrador, 2021 NLSC 92

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Power v. Association of Chartered Professional Accountants of Newfoundland and Labrador , 2021 NLSC 92 Date : June 24, 2021 Docket : 202001G6093 Between: Michael Power APPELLANT And: Association of Chartered Professional Accountants of Newfoundland and Labrador Respondent Before: Justice Carl R.

Thompson Edited Transcript of Oral Reasons for Judgment On Appeal From: A Decision of the Disciplinary Panel of the Institute of Chartered Accountants of Newfoundland and Labrador and the Association of Chartered Professional Accountants of Newfoundland and Labrador pursuant to the Chartered Accountants Act, 2008 and the Chartered Professional Accountants and Public Accountants Act , 2014 dated the 30th day of November, 2020. Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: June 15, 2021 Date of Oral Judgment: June 15, 2021

Summary: As s. 43(1) of the Act does not direct procedure on appeal, Rules 58.02 and 58.03 governing procedure apply requiring leave, and as the Tribunal had not completed its hearing on sanction following a finding of misconduct, leave to appeal the finding was declined. The Court did not exercise prerogative relief as the allegation of bias on the part of the Tribunal, based on an allegation of a conflict of interest of counsel to the Tribunal did not present one of those rare circumstances where the Court might otherwise intervene notwithstanding the normal deference afforded to such Tribunals to first consider such allegation.

Appearances: David D. McKay, Q.C. Appearing on behalf of the Appellant Augustine F. Bruce, Q.C. Appearing on behalf of the Respondent Authorities Cited: CASES CONSIDERED: Babb Construction Limited v. Parsons, 2020 NLSC 115; Institute of Chartered Accountants of Newfoundlandand Labrador v. Cole, 2017 NLTD(G) 73; Canadian Pacific Ltd. v. Matsqui Indian Band, (SCC), [1995] 1 S.C.R. 3;Committee for Justice & Liberty v. (Canada) National Energy Board, (SCC), [1978] 1 S.C.R. 369; Vey v. Newfoundlandand Labrador Pharmacy Board, 2019 NLCA 72; C.E.P., Local 60N v.

Abitibi Consolidated Inc., 2008 NLCA 4 STATUTES CONSIDERED: Chartered Accounts Act, 2008, S.N.L. 2008, c. C-9; Chartered Professional Accountants and PublicAccounts Act, S.N.L. 2014, c. C-10 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D REASONS FOR JUDGMENT Thompson, J.: INTRODUCTION [1] The Appellant Michael Power, CPA, CA, (“Mr. Power”) seeks an Order pursuant to Rule 58.03 of the Rules of the SupremeCourt, 1986, S.N.L. 1986, c. 42, Sch. D, granting him leave to start the within appeal and if such leave is required to start that appeal. Mr.

Power’s position is such that leave is not required. [2] If leave is not required, or if it is required and granted, Mr. Power seeks to have one ground of his appeal heard at this time. That ground of appeal is that the whole of the decision is being appealed on the basis that the decision has been made in circumstanceswhere there existed a reasonable apprehension of bias on the part of the Adjudication Tribunal such that the Adjudication Tribunal’s dutyof fairness to the Appellant has not been met.

Reasonable Apprehension of Bias [3] This matter relates to a Complaint referred to the Disciplinary Panel of the Institute of Chartered Accountants ofNewfoundland and Labrador and the Association of Chartered Professional Accountants of Newfoundland and Labrador pursuant to theChartered Accounts Act, 2008, S.N.L. 2008, c. C-9 and the Chartered Professional Accountants and Public Accounts Act, S.N.L. 2014,c.

C-10 (the “Act”), against the Appellant, Michael Power (the “Complaint”). [4] The Adjudication Tribunal was convened following the referral of the Complaint from the Complaints AuthorizationCommittee of the Respondent (the “Association”). [5] The hearing before the Adjudication Tribunal commenced on June 11, 2018 and evidence was presented over 7 days in 2018and 2019. The parties filed written submissions and oral submissions were heard on August 31, 2020.

Upon completion of the oralsubmissions, the Adjudication Tribunal reserved its decision. [6] The Adjudication Tribunal made its decision and provided it to the parties on November 30, 2020. The Adjudication Tribunal

found the Association had made out 6 of the 12 charges and the Appellant appeals in relation those 6 charges. The Adjudication Tribunal found the Association had not made out the other 6 charges (the “Decision”). [ 7 ] The Decision of the Adjudication Tribunal has been made in an uncompleted matter. The Adjudication Tribunal directed the parties in its Decision to reconvene at a date to be chosen by the Adjudication Tribunal (previously postponed pending this appeal) to address sanctions to be imposed pursuant to

Section 36.3 of the Act . background [ 8 ] On August 28, 2020, Mr. Power’s solicitors submitted to Mr. Liam P. O’Brien, counsel for the Adjudication Tribunal and to Mr. Augustine F. Bruce, Q.C., counsel for the Association, a copy of the August 27, 2020 decision of this Court in Babb Construction Limited v. Parsons , 2020 NLSC 115 with a request that it be submitted that day to the Adjudication Tribunal for its consideration. The Parsons party to that Court proceeding was Mr. John Parsons, the individual who had made the allegations leading to the Complaint and charges against Mr.

Power, and who had testified against Mr. Power before the Adjudication Tribunal. [ 9 ] The Court decision in Babb Construction dealt with the same corporate share transaction as in the Complaint. [ 10 ] The Court decision was referenced by Mr. Power’s counsel in the oral submissions made to the Adjudication Tribunal on August 31, 2020. The reference related to the Court’s concern, as expressed at paragraph 54 of the Court’s decision, about Mr. Parsons’ reliability and the reliability of certain documents upon which Mr. Parsons was basing his defence. The Court went on in that case to order that Mr.

Parsons pay Babb Construction Limited $400,000.00, that Mr. Parsons hold the 1000 common, voting shares in 52182 in trust for Babb Construction Limited until the $400,000.00 was paid in full, and that Mr. Parsons pay costs of that application under Column 3 of the Scale of Costs. [ 11 ] On August 31, 2020, following the oral submissions of counsel for the Association and for Mr. Power, the Adjudication Tribunal reserved its decision. [ 12 ] On September 21, 2020, Mr. Parsons consulted Gregory M. Smith, Q.C., a law partner of Mr. O’Brien, in relation to the appeal of the Babb Construction decision.

On September 23 or 24, 2020, Mr. Smith had a general discussion with Mr. O’Brien about a corporate law issue Mr. Smith was considering in relation to Mr. Parsons’ appeal. During their discussion, Mr. O’Brien realized the issue related to the matters in which he was counsel to the Adjudication Tribunal. He advised Mr. Smith of his involvement with the Adjudication Tribunal’s hearing of a complaint initiated by Mr. Parsons against an accountant. Mr. Smith confirmed the issue he was considering did involve Mr. Parsons and that he had had some discussion with Mr.

Parsons regarding the possible appeal of that Court decision. Mr. O’Brien made it clear to Mr. Smith that their law firm should not represent or continue to represent Mr. Parsons and Mr. Smith agreed. [ 13 ] Mr. Smith advised Mr. Parsons of this decision and of the need for Mr. Parsons to obtain replacement counsel. In light of the September 30, 2020 filing deadline for Mr. Parsons’ Notice of Appeal, Mr. Smith continued his work in drafting the Notice and provided his working drafts to replacement counsel on September 28 and 29, 2020.

The Notice of Appeal was filed by replacement counsel on September 30, 2020. [ 14 ] Neither Mr. O’Brien, the Adjudication Panel nor the Association informed Mr. Power of the relationship between Mr. Parsons and Curtis Dawe Lawyers. Mr. Power takes the position that had he been so informed, he would not have consented to Mr. O’Brien continuing to act as counsel to the Adjudication Tribunal. [ 15 ] On November 30, 2020, Mr. O’Brien as counsel for the Adjudication Tribunal provided the Decision of the Adjudication Tribunal to the parties. [ 16 ] In his Affidavit filed in this application, Mr.

O’Brien outlined his role as independent counsel to the Adjudication Tribunal. A part of that role would have continued during the time of the Adjudication Tribunal’s deliberations after completion of the oral submissions on August 31, 2020, and in the preparation of the Decision of the Adjudication Tribunal dated November 30, 2020. [ 17 ] As stated by Mr. O’Brien in his affidavit, in part, his role included: 20. … d. Reviewing draft decisions as prepared by the Tribunal following its deliberations; e.

Discussing draft decisions with the Tribunal, so as to ensure they were reflective of the Tribunal members’ collective findings and reasoning. [ 18 ] As described by the Appellant there is an issue as to whether counsel for the Adjudication Tribunal ceased to be an independent advisor to the Adjudication Tribunal and thereby created a reasonable apprehension of bias on the part of the Adjudication Tribunal such that the duty of fairness to Mr. Power has not been met. statutory appeal and rules of court [ 19 ]

Section 43 of the Act provides: 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.

(2) An appeal under this

section does not stay the decision or order being appealed unless the Trial Division orders otherwise. [ 20 ] Rule 58.01 (

d) and (

k) state: 58.01 The following

definitions apply to this rule (d) "decision" means (

i) a formal order of a decision-making authority, (ii) an order or decision made in an uncompleted matter, and (iii) anything accepted by a decision-making authority as having the same effect as a formal order; (k) "uncompleted matter" means a matter where the issues between the parties have not been determined by a final decision of a decision-making authority. [ 21 ] Rule 58.02: 58.02(1) This rule governs the procedure for making an appeal in the Supreme Court.

(2) Despite subrule (1), where an applicable statute provides a procedure different from that set out in this rule, the statute governs.

(3) Where an issue respecting practice or procedure arises which is not covered by this rule or by an applicable statute, any of rules 1 to 4 or the rules in

Part I may be applied as required, with any necessary modifications.

(4) This rule does not apply to appeals in the Court of Appeal. [ 22 ] Rule 58.03 (in part): 58.03(1) A person must seek leave of a judge to start an appeal where any of the following circumstances apply: (

a) the person intends to appeal a decision made in an uncompleted matter; (

d) a statute requires that the person seek leave of the Court prior to starting an appeal.

(6) A judge may grant leave to appeal where the judge is satisfied that the interests of justice require that leave be granted.

(7) A judge may grant leave to appeal summarily without a hearing where the judge determines it is appropriate to do so.

(8) Where a judge grants leave to appeal, the judge may, either at the time of the hearing or after, decide the appeal without requiring further submissions from the parties if the merits of the appeal were argued at the time of the leave application.

(10) A failure to seek or obtain leave to appeal a decision made in an uncompleted matter does not (

a) prejudice the right of a party to appeal from that decision on an appeal taken once the matter is completed; or (

b) limit the power of a judge to grant an order on an appeal from a completed matter that the judge considers appropriate. [ 23 ] The Appellant is of the view that leave is not required even in a bifurcated Tribunal hearing because section 43(1) overrides

Rules 58.02 and 58.03. The Appellant further notes that in Institute of Chartered Accountants of Newfoundland and Labrador v. Cole,2017 NLTD(G) 73 at paragraph 33 the Court noted: 33 As we saw above, both the 2014 Act and the 2008 Act provide a right of appeal to this court from a decision or order of anadjudication tribunal. Both sections 43 provide that an appeal may be brought within 30 days from receiving notice of a decision ororder. They do not provide for the ability to extend the time for filing an appeal.

Nor do they make the appeal rules of this Courtapplicable to the statutory appeal. [24] I note that in Cole, Rule 58 was not then in force. Rule 58 is now much clearer on this issue than the provisions of the formerRule 57. [25] Former Rule 57.02 read in part: 57.02.

(1) Leave to appeal shall be obtained by application to the Court where

a) during the course of a proceeding or prior to a final order, a party seeks to appeal from an interlocutory order … considerations and conclusions on leave [26] The current Rule 58 defines an “uncompleted matter” as a matter where the issues have not been determined by a “finaldecision”. Former Rule 57 did not provide the language now used to specifically identify an uncompleted matter and require leave. Former Rule 57 nevertheless did contemplate requiring leave for an appeal prior to a final order.

The Appellant notes that the Court inCole did not require either party to obtain leave to appeal the Tribunal’s interlocutory decisions. I do note that the Court in Cole was notasked to do so. Notably, an error going to jurisdiction had been identified in Cole making on its face, a more suitably earlier review ofthe Tribunal’s continuing to proceed. [27] In my view, Rule 58.02(2) and (3) is now clear as to when a statutory appeal is governed by the Rules of Court. If thegoverning statute granting the right of appeal is silent on the procedure, Rule 58 applies.

In this case s. 43(1) grants the statutory right ofappeal to be effected by the filing of the Notice of Appeal in this Court within 30 days after receiving Notice of the Tribunal decision. While s. 43(1) directs the action required in order to engage the processing of that appeal, I do not see s. 43(1) providing any differentprocedure as contemplated in Rule 58.02(2) now necessary in order for the statute to override the Rule as to the procedure on appeal.

Considerations and conclusions on bias [28] Notwithstanding that conclusion, the question I will next consider is whether the Court should exercise discretion by way ofprerogatory relief to allow relief to the Appellant in the face of this allegation of bias. [29] The test for reasonable apprehension of bias is whether a reasonably informed bystander could reasonably perceive bias on thepart of the adjudicator. The apprehension of bias must be a reasonable one held by reasonable and right minded people applyingthemselves to the question and obtaining thereon the required information.

The test is “what would an informed person viewing thematter realistically and practically, and having thought the matter through, conclude.” (Canadian Pacific Ltd. v. Matsqui Indian Band, (SCC), [1995] 1 S.C.R. 3 and Committee for Justice & Liberty v. (Canada) National Energy Board, (SCC), [1978] 1 S.C.R. 369. [30] The question of bias of the Tribunal is presented by way of the actions of counsel of the same firm in having an exchange, oneof them assisting a party in filing an appeal of a related matter and the other being counsel to the Tribunal in this matter.

The applicationof the test for Tribunal bias requires an assessment of the mind of a reasonable person informed viewing the matter realistically andpractically and having thought the matter through. [31] In my view, the circumstances which would inform the person having to view the matter as required by the test are notavailable to support the presence or not of bias on the part of the Tribunal as I will now discuss. [32] The relief sought by the Appellant is based upon the involvement of counsel to the Tribunal as having potential for a conflict ofinterest giving rise to a reasonable apprehension of bias on the part of the Tribunal. [33] In my view, the exercise of discretion for prerogative relief, as with the appeal if leave had been granted, requires an informedbasis by which the Tribunal’s determinations may have been influenced by the proposed conflict.

That would require me to assume thatby the proposed conflict this Tribunal itself is compromised in the independence and the integrity of its deliberations. [34] In my view, the presence only of the proposed conflict cannot engage even a preliminary investigation of the merits of thisallegation. [35] It appears to me that the nature of the allegations of bias has to be proven as present at the Tribunal level.

The evidence ofwhether or not the Tribunal demonstrated bias or acted to present a reasonable apprehension of bias has to originate in the Tribunal itselftaking receipt of the allegation, assessing its contents and directing its mind to whether the test for reasonable apprehension of bias ismade out. Absent that, this Court cannot evaluate that assessment. The Tribunal’s own assessment of the allegation in this case has toproceed and form the basis for any further consideration by this Court. [36] This Court is bound by the direction in Vey v. Newfoundland and Labrador Pharmacy Board, 2019 NLCA 72.

At paragraph12 of Vey the Court of Appeal stated: 12. … in the case of professional misconduct, the matter is ordinarily dealt with at first instance by an administrative tribunal. The

tribunal's decision may be the subject of an appeal or judicial review, which may, in turn, be appealed to this Court. A finding of misconduct and an appropriate sanction completed at first instance by the tribunal before proceeding to the courts will, in all but rare circumstances, provide the most expeditious and effective procedure for all parties and the courts. [ 37 ] This is a Tribunal decision at first instance determining professional misconduct in a recognized bifurcated process with considerations of sanctions now engaged before it and yet to be determined.

In all but rare circumstances, I am directed to decline jurisdiction and possible intervention at this time. [ 38 ] Assistance with consideration of other rare circumstances which may or may not combine to warrant intervention notwithstanding the direction in Vey , may be found in C.E.P., Local 60N v. Abitibi Consolidated Inc. , 2008 NLCA 4 at para. 34 as follows: 34. Jones and DeVillars in their Principles of Administrative Law , 4th ed. (Toronto: Carswell, 2004), give a more nuanced opinion. They write, under the rubric 'Can the rule against bias be waived': Which view is the better?

In our opinion, the better view is that the court has a discretion depending on the circumstances of the particular case and tribunal. It should not be an inflexible rule that bias must be raised before the tribunal, and neither should it be an inflexible rule that bias need not be raised before the tribunal. The principal value at stake is the efficient administration of justice. Sometimes it will be more efficient for a bias allegation to be heard and decided by the tribunal, other times by the court. The following factors might be taken into account: (

a) The time and expense, and the effect on the parties, the tribunal, and the public interest, involved in continuing a proceeding that may later be quashed. Evaluation of this factor will depend, for example, on the nature of the proceeding and its anticipated length. (

b) The strength of the applicant's case. The stronger the case for a disqualifying bias, the more efficient it is for the court to decide the matter as quickly as possible. (

c) The completeness of the record. The court should consider whether the evidence will be more complete if the matter is heard and decided by the tribunal. (

d) Whether the allegation of bias is, by its nature, something that could be remedied by the tribunal. For example, an allegation of personal bias on the part of a potential panel member can generally be resolved internally. An allegation of institutional bias may require judicial intervention. (

e) Whether the tribunal is sophisticated enough to apply correctly the law on bias. Many smaller tribunals will have no legally-trained members and no access to legal advice. (

f) Whether the court believes there is any value in having the tribunal's own opinion on the allegations of bias. (

g) Whether the threshold test for discovery of the tribunal has been met. If it has, and discovery is ordered, the tribunal will be in the untenable position of having to adjudicate a dispute in which it has, in effect, become one of the parties. The application of these factors will generally be enough to differentiate between cases where bias ought to have been raised before the tribunal, and cases where it may be raised for the first time on judicial review. There is no need to add an additional hurdle, namely whether the objection was raised in a timely way. [emphasis original] [ 39 ] In

summary of those considerations as applicable to the case before me, I note:

a) This matter requires as part of its established protocol a bifurcated process. The nature of the proceeding and its length are themselves circumscribed by that process.

b) The Appellant’s case on appeal I have noted separately is not reasonably determinable at this time.

c) The record of the Tribunal on this allegation is not available as noted.

d) Until engaged by the Tribunal and determined, its remedial authority, if appropriate to resolve by the Tribunal, is not yet engaged.

e) The Tribunal is a self-governing legislative body qualified to fully engage the exercise of its jurisdiction with legal counsel available to it. [ 40 ] As noted, I am of the view that the Tribunal’s review and determination of the allegation of its bias is necessary. The Appellant notes that it is the alleged conflict of interest of counsel of itself that gives rise to an apprehension of bias sufficient to attract this Court’s intervention. For the reasons noted, however, this would not be one of the rare circumstances allowing the Court to effect relief without the Tribunal having first dealt with the issue.

To do so would potentially undermine the deference of this Court to these Tribunals as historically developed. [ 41 ] Finally, it would be inappropriate to engage jurisdiction over this Tribunal now to be seized with both its assessment of its own bias and the appropriate remedy following its findings of misconduct.

CONCLUSION [ 42 ] I conclude that: 1) Leave to appeal is required; 2) Leave to appeal is declined as the Tribunal has yet to complete the matter before it; and 3) The allegation of bias must first be presented to the Tribunal and determined by it. costs [ 43 ] The Respondent is entitled to costs at Level III of the Scale of Costs. _____________________________ Carl R. Thompson Justice