Most regulators are not liable for damages unless they act in bad faith. The rationale for this qualified immunity is to enable regulators to avoid being so concerned about being sued that they minimize their public protection activities. Ontario’s highest court provided a similar reassurance to regulators from being found in contempt of court.
It is not uncommon for regulators to interpret and apply court orders, such as a ban on publication, in circumstances where the regulator has a competing statutory duty (e.g., to conduct its proceedings in public). In Association of Architectural Technologists of Ontario v Ontario Association of Architects, 2026 ONCA 539, the Court of Appeal observed: “The underlying dispute in this case concerns a decades-long political battle between the Ontario Association of Architects (the “OAA”) and the Association of Architectural Technologists of Ontario (the “AATO”) over which organization can and should regulate architectural technologists in the province.” The OAA had agreed, through a consent court order, to stop staff, on their own, from registering architectural technologists. However, However, in accordance with its act, it agreed to accept and process applications from former licensees which resulted in hearings before the Registration Committee. In certain situations, the Registration Committee exempted licensing requirements and directed the Registrar to register the former licensees albeit with limitations. The lower Court determined that this amounted to contempt of the consent order, even though the OAA honestly believed it could legally apply the statutory process.
The Court of Appeal said that this “provides a textbook illustration of the inappropriate use of the Superior Court’s contempt power.” The Court of Appeal found that the lower Court focused on an issue that was not before it (namely, whether the licenses that the Registration Committee directed the Registrar to issue were valid.) The Court of Appeal indicated that even if the regulator had exceeded its jurisdiction (which the Court of Appeal did not determine one way or the other), that did not amount to contempt of court. Rather, to make a finding of contempt of court, three criteria must be met:
(i) the order the alleged contemnor breached must be clear and unequivocal; (ii) the alleged contemnor must have actual knowledge of the order; and (iii) the alleged contemnor must have intentionally disobeyed the order.
In terms of the first criterion, in the lower Court’s view, the regulator’s interpretation of the consent order was not the most reasonable one. The Court of Appeal found that this did not constitute proof beyond a reasonable doubt that the terms of the order were clear and unequivocal.
In terms of the third criterion, the Court of Appeal found that the lower Court had not (and, indeed, could not) make a finding that the regulator intentionally breached the consent order by following its statutory process. For example, the Court of Appeal said: “Since the motion judge expressly acknowledged that the Registration Committee did not breach the Order in providing this direction to the Registrar, it is difficult to understand how this conduct could constitute an intentional breach of the Order.”
The Court of Appeal also stated that even where the criteria were met, a court must exercise discretion in making a finding of contempt of court: “The court may decline to impose a finding of contempt where it would work an injustice in the circumstances of the case, including where less onerous remedies, such as a declaration that the party breached the order, would be sufficient to compel compliance….” That discretion was not exercised here.
The concluding words of the Court of Appeal should provide further reassurance to regulators wishing to exercise their mandate in uncertain circumstances:
Reputation plays a central role in human societies, and it is well established that “reputation is one of the most valuable assets a person or a business can possess”…. Reputation is equally important to regulatory organizations such as the OAA, whose effectiveness ultimately depends upon public confidence that it is acting in the public interest.
It is one thing for a court to determine, in an appropriate case, that an organization such as the OAA has fallen short of its statutory obligations and acted without jurisdiction. It is quite another to criticize the organization for: “perverting its core mandate”; being “unconscious to the seriousness of the breach”; engaging in an “absurd pretense”; conducting itself in a manner that “may be unprecedented in Canadian law”; using a statutory committee as “a false cover for issuing licences prohibited by the court order”; and being “prepared to compromise its public-protection mandate to perform an end run around the court order”.
It is difficult to conceive of the circumstances which would justify the use of such dismissive and derogatory language in describing the exercise of statutory powers by a professional regulator. Plainly, however, there was no basis for the use of such language in relation to the actions of the OAA in this case, since the organization appears to have acted throughout in good faith and in a manner which it genuinely believed was in furtherance of its statutory mandate to protect and serve the public interest.
*In the interests of transparency, SML was legal counsel to the Registrar in this matter.
