May 20, 2013

Conduct unbecoming of a professional: threats of frivolous reports

Administrative Law
Professional Regulation

The “private” or “personal” conduct of professionals can still be “unprofessional conduct” involving significant consequences. A reminder of this principle arises from the recent decision of Erdmann v. Institute of Chartered Accountants of Alberta, 2013 ABCA 147.

Ms. E, a chartered accountant, engaged in a dispute with the builder of her residential condominium about a crack in her ceiling, and a dispute with the condominium board’s property management company about her ability to attend a condo board meeting.  Ms. E sent two emails to representatives of the builder and the property management company threatening to report the companies to various government agencies, including Canada Revenue Agency. These agencies did not relate to the issue at hand, i.e., a crack in her ceiling. In both emails, she identified herself as a chartered accountant.  Complaints to the Institute of Chartered Accountants of Alberta (the “Institute”) asserted professional misconduct.

Discipline Tribunal: At the disciplinary hearing, Ms. E raised several objections, asserting in part that the tribunal lacked jurisdiction over private matters. The Discipline Tribunal dismissed the argument, noting that actions in one’s private life can constitute unprofessional conduct. The tribunal reprimanded Ms. E for unprofessional conduct, ordered her to undergo counseling, fined her $10,000, and ordered her to pay $99,610 as the full cost of the investigation and hearing. Ms. E elongated the haring through numerous and repeated jurisdictional and procedural arguments.  Ms. E appealed the decision to the Institute’s Appeals Tribunal.

Appeal Tribunal: Ms. E reiterated the Institute had no jurisdiction as she had sent the emails as a private citizen. The Appeal Tribunal found the reprimand and the fine reasonable, but the counseling and costs orders were not. The Committee had not sought the counseling order, and the Appeal Tribunal quashed it. The Discipline Tribunal imposed the costs order before it knew the investigation and hearing costs, and it was excessive. The Appeal Tribunal reduced costs by 25 percent (to just under $75,000) and ordered that Ms. E also pay 75 percent of the costs of the appeal, to a maximum of $56,250.  Ms. E appealed to the Alberta Court of Appeal.

Court of Appeal: The Court of Appeal focused on the private emails as unprofessional conduct, noting that a “charted accountant’s status in the community at large means that his/her conduct will from time to time be the subject of scrutiny and comment… It follows that a chartered accountant must ensure that her conduct is above reproach in the view of reasonable, fair-minded and informed persons.” [20] The Court of Appeal upheld the decision of the Appeal Tribunal as reasonable. It noted first the lack of any nexus between her insistence that repairs be completed, and her threats to the builder that she would file complaints with certain agencies, i.e., WCB, the utilities commission and Canada Revenue Agency. [26-27] Her conduct was disgraceful in a professional respect, in the sense that it tended to bring disgrace on the profession. [28-30] The court also upheld the finding of unprofessional conduct arising from Ms. E making a “veiled threat” to the management company to engage the Canada Revenue Agency’s special investigations unit. [31]

While professionals are entitled to express concerns and make complaints in their private lives, they must always be cognizant of how their actions reflect on their profession. The courts upheld a decision here of disgraceful conduct where a professional, identifying herself as such, made threats of frivolous reports to various government agencies, to cause inconvenience. The case also highlights the practical importance to registrants of a focused defence, given that the professional was ultimately responsible for about $75,000 in tribunal costs, and additional appeal costs, reflecting in part her repeated jurisdictional arguments.

Erdmann v. Institute of Chartered Accountants of Alberta, 2013 ABCA 147