Can a regulator make a finding of professional misconduct against a registrant based largely on the evidence of a witness who has a strong motivation for making and establishing the complaint?
In Chartered Professional Accountants of Alberta (Complaints Inquiry Committee) v Mathison, 2024 ABCA 33 (CanLII), the complainant, who was the former employer of the registrant, was also the key witness at the discipline hearing. The employer admitted that a purpose for making the complaint was to obtain evidence to support terminating the registrant for cause. The employer had reported the matter to the police and then appeared to use that report as part of the negotiations on the severance package. Hundreds of thousands of dollars were at stake. The dispute was over whether the registrant had the permission of the employer to loan or pay himself money from the employer’s funds. The registrant asserted that the payments had been authorized. The registrant also submitted that there were several suspicious circumstances in the employer’s complaint, including that the transactions were documented in the company’s books and the delay in the employer raising the concerns.
The majority of the Court gave deference to the regulator’s finding of credibility in favour of the employer’s evidence. The majority was not prepared to conclude that the poor word choice in the regulator’s reasons for decision meant that the hearing panel disregarded the employer’s motivations when assessing his credibility. The majority also held that it was unnecessary for the hearing panel to determine which of the two parts of the phrase “knew or ought to have known” applied to the registrant when making a finding of misconduct. However, the majority did find that, in the absence of an express finding that the registrant knew there was no authorization to pay the funds, the sanction cannot be based on that assumption. The deference shown by the majority of the Court is familiar to most regulators experiencing judicial scrutiny.
The dissenting member of the Court took a much different approach in a strongly worded and extraordinarily detailed judgment. [The dissenting judgment was more than three times longer than the majority judgment and contained more than 450 footnotes, compared to one footnote contained in the majority’s reasons.] The Justice began with a discussion of the impact of discipline upon registrants:
Regulators of professionals exercise powers that may destroy a regulated member’s career and deprive him or her of a livelihood. The public and regulated members accept that this is a necessary consequence of protecting the public interest. But they expect regulators to wield their enormous powers fairly and with the utmost care, keenly aware of the adverse effects a regulated member may suffer as a result of a finding of unprofessional conduct. And they also expect appeal courts to set aside regulatory dispositions that fall short of this high standard. In doing so, a court protects the public interest, the regulated member charged with misconduct, other regulated members, the regulator, and the complainant. No one benefits if a court upholds an errant disciplinary decision. The community needs highly skilled professionals in the workforce doing what they are trained to do. [citations omitted]
In finding that the registrant in this matter “is the victim of a miscarriage of justice – a grave miscarriage of justice”, the dissenting Justice reviewed the evidence at length concluding that the regulator had not addressed the evidence that the employer’s complaint and evidence exhibited partiality, motivated by a desire to gain a financial advantage. The Justice also held that the regulator had not properly addressed the wording of the allegations themselves, particularly the “known or ought to have known” language.
The dissenting justice also stated:
He [the employer] has converted the complaint process into a civil litigation weapon. No regulator should allow itself to be used in this way. Mr. Leonard, in effect, caused the regulator to deploy its considerable statutory powers and resources against Mr. Mathison and to assist Canada Pump in its civil dispute with Mr. Mathison.
The majority of the Court upheld the findings but restored the hearing panel’s sanction of a two-year suspension (rather than maintaining the appeal panel’s order of revocation). The dissenting Justice would have reversed the finding entirely. While it is not uncommon for panels of judges to have different views, the extent of the disagreement in the approach to scrutinizing the decision, in the tone towards the regulator, and in the outcome for the registrant in this decision is unusual.