Profession Standards Ethics

Canadian accountants cannot resign membership to avoid discipline hearings

Alberta court denies accounting professional’s attempt to stay proceedings

Author: Canadian Accountant

TORONTO, Jan. 22, 2023 – As members of a regulated profession, Canadian accountants face the prospect of a complaints and discipline process conducted by provincial regulators, should allegations of wrongdoing occur. A recent case before the Court of King’s Bench of Alberta indicates that, once an investigation occurs, not even an offer of resignation can stop investigations from proceeding to discipline hearings. 

The case involves a chartered professional accountant and member of CPA Alberta. In 2019, CPA Alberta received a complaint from Deloitte LLP raising “serious allegations,” according to the court’s decision, of professional misconduct against the member. That same year, the member provided CPA Alberta with an interim voluntary restriction, in which the member would “irrevocably undertake” not to apply for the reinstatement of their registration with CPA Alberta. 

CPA Alberta continued its investigation and, in 2021, advised that the evidence warranted a discipline hearing. As an alternative to a hearing, the member offered to resign from CPA Alberta and to never again practise as a professional accountant. 

During the same period, the member’s former employer filed a complaint with the RCMP. Neither CPA Alberta nor Deloitte filed a complaint with the RCMP. After three years, as the Court noted, the RCMP did not contact, question or lay a criminal charge against the member. The former employer’s complaint to the RCMP did not result in any action by the time of the Court’s decision. 

The member took CPA Alberta to court seeking a stay or injunction enjoining the regulator from proceeding with the discipline hearing. As an alternative, the member argued for a new investigation instead, which the justice rejected. 

The legal foundation for both is based on RJR-MacDonald v Canada (AttorneyGeneral), 1994 CanLII 117 (SCC) and its three-part test, known as the RJR MacDonald Test for granting an injunction:

  1. Is there a serious issue to be tried?
  2. Would the applicant for the injunction suffer irreparable harm if the injunction were not granted?
  3. Is the balance of convenience in favour of granting the interlocutory injunction or denying it?

In each of the three parts, Justice Michalyshyn found that the evidence did not meet the necessary criteria of the test. In regards to “irreparable harm,” the member noted the financial commitments and health impact associated with a disciplinary hearing. 

In dismissing the argument, the Justice emphasized the professional obligations of members of regulatory bodies: “having voluntarily entered into and enjoyed the benefits of the regulated profession of accounting, [the member] cannot now avoid the obligation of participating in a disciplinary hearing which is required under the Act.” 

It is an interesting point that bears repeating. Aspiring accountants may see only the financial and career rewards of the profession. They may not consider (despite repeated reminders from regulatory bodies) that they are bound by a Code of Conduct and the regulatory processes of the profession. Indeed, many should see this as a reward or benefit of the profession itself, as it binds all members to the same standards. 

Some legal commentary on this case is available online. Rebecca Durcan of Steinecke Maciura LeBlanc (SML Law) says the decision “suggests that it would be rare for a regulator to be forced to accept a resignation of a [member] rather than to proceed with a discipline hearing if the regulator so chose.” 

As Luisa Hlus of Acumen Law Corporation explains, in Resigning does not stop discipline: “Nearly all regulators have express statutory jurisdiction to investigate and discipline both current and former licensees, members or registrants. 

“The public policy behind the legislature’s intent is to prevent professionals from avoiding investigation, remediation, discipline and publication by simply resigning.” 

The member took the regulator to court in a bid to stop to stop the disciplinary hearings. In the end, despite several arguments put forth, the case was dismissed and CPA Alberta is free to proceed (at time of publication, no hearing has been posted online.) 

By Canadian Accountant staff with files from the Court of King’s Bench of Alberta.

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