Deloitte & Touche LLP v. Institute of Chartered Accountants (Alta.), (2008) 433 A.R. 41 (CA)

• Judge: Picard, Hunt and Slatter, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: April 11, 2008
• Citations: (2008), 433 A.R. 41 (CA);2008 ABCA 162

Deloitte & Touche LLP v. Accountants (2008), 433 A.R. 41 (CA);

      429 W.A.C. 41

MLB headnote and full text

Temp. Cite: [2008] A.R. TBEd. MY.076

Deloitte & Touche LLP (appellant) v. The Complaints Inquiry Committee of the Institute of Chartered Accountants of Alberta (respondent)

(0701-0168-AC; 2008 ABCA 162)

Indexed As: Deloitte & Touche LLP v. Institute of Chartered Accountants (Alta.)

Alberta Court of Appeal

Picard, Hunt and Slatter, JJ.A.

May 9, 2008.

Summary:

An appeals tribunal affirmed a discipline committee's finding that Deloitte & Touche LLP (Deloitte) was guilty of professional misconduct for breaching duties of confidentiality. Deloitte appealed.

The Alberta Court of Appeal, Slatter, J.A., dissenting, allowed the appeal in part and set aside one of the findings of professional misconduct. The court reduced the fine imposed by $2,500 and reduced the costs payable by Deloitte by 25%. The remaining sanctions (publication and instructions to Deloitte's employees) were to be modified as necessary.

Professional Occupations - Topic 1423

Accountants - Discipline - Professional misconduct - False or misleading statements - McCaffrey retained Nelson, a chartered accountant with Deloitte & Touche (Deloitte), to investigate the assets of her ex-husband, Dalla Longa (a chartered accountant), and to report on the reasonableness of his income - Deloitte provided a preliminary report - A final report was never completed - McCaffrey filed the preliminary report in an application in family court proceedings - Dalla Longa contacted Preston and Pinney at Deloitte about the report - Nelson reported to Preston and Pinney by email, attaching a copy of the report and concluding that they had not slighted Dalla Longa's reputation - A discipline tribunal found that Deloitte & Touche conducted itself unprofessionally by, inter alia, allowing itself to be associated with Nelson's false and misleading statements (Combined Rules of Professional Conduct and Related Guidelines, rule 205) - An appeal tribunal upheld the decision - The Alberta Court of Appeal affirmed the decision - There were two considerations, one objective and the other subjective - With respect to the subjective test, the discipline tribunal held that Nelson did not know that the report contained innuendos - With respect to the objective test, the discipline tribunal applied the proper test, that of the ordinary, reasonable and prudent chartered accountant - Its assessment was that any chartered accountant would have thought that the report slighted his/her reputation - The appeal tribunal agreed - Since both tribunals included accountants, both were in a uniquely advantageous position to make that finding of fact - Their conclusion was not unreasonable - The fact that the email was an internal communication did not change anything - If internal communications were to be exempted, the rule should have said so - See paragraphs 23 to 27.

Professional Occupations - Topic 1423

Accountants - Discipline - Professional misconduct - False or misleading statements - A discipline tribunal found Deloitte & Touche (Deloitte) guilty of professional misconduct for, inter alia, denying that it had disclosed confidential information when the secretary for the Institute of Chartered Accountants advised it of a complaint - An appeal tribunal affirmed the finding - The Alberta Court of Appeal set aside the finding of guilt - The institute had, in effect, decided that the very plea of not guilty was itself a false statement, because in the end the Institute found Deloitte guilty - The Regulated Accounting Profession Act required that the professional respond to any complaints made against the professional - It was a fundamental principle of due process that a person accused of misconduct was entitled to defend himself or herself - The tribunal's interpretation put the professional in an impossible situation - If the professional admitted the charge, he or she would be found guilty - If the professional refused to comment, he or she would be charged with failing to cooperate with the investigation - If the professional denied the charges, he or she would be charged with making a false statement, in addition to any charges arising from the complaint itself - It was contrary to the concepts of fairness and natural justice to suggest that the very denial of the charge could itself be the subject of another charge - See paragraphs 28, 90 and 91.

Professional Occupations - Topic 1424

Accountants - Discipline - Professional misconduct - Disclosure of confidential information - Deloitte advised McCaffrey by letter that it was withdrawing a report respecting an investigation into the assets and income of her ex-husband (Dalla Longa) - The letter also referred to the fact that McCaffrey had not paid her invoices and stated that because she breached the retainer by filing the report in court without their consent they were not prepared to act for her - Deloitte also advised Dalla Longa of its decision to withdraw the report - McCaffrey asked Deloitte if any confidential information had been shared with Dalla Longa or his lawyer - Deloitte responded in the negative - A similar denial was made to the Institute of Chartered Accountants - In response to a notice to attend as a witness in proceedings between McCaffrey and Dalla Longa, Tario of Deloitte swore an affidavit and attached a copy of the letter that had been sent to McCaffrey - A discipline tribunal found that Deloitte was guilty of, inter alia, three counts of professional misconduct for breaching it duty of confidentiality - The tribunal found that Dalla Longa was advised of the withdrawal before McCaffrey and that Deloitte should have known that the information provided to Dalla Longa was confidential client information - Moreover, the reasons for the withdrawal of the report was confidential client information - It was only the contents of the report which ceased to be confidential once filed in the court proceedings - The affidavit was filed without McCaffrey's consent and contrary to her instructions - Deloitte failed to follow rule 208.2 which provided detailed information on what to do in such circumstances - Further, Deloitte did not bring to the court's attention its duty to McCaffrey before filing the affidavit - An appeal tribunal agreed - The Alberta Court of Appeal affirmed the decision - Deloitte's reliance on litigation privilege rules was misplaced - The Institute had enacted rules and guidelines that governed the profession - See paragraphs 41 to 50.

Professional Occupations - Topic 1493

Accountants - Disciplinary proceedings - Judicial review - Standard of review - An appeals tribunal affirmed a discipline committee's finding that Deloitte & Touche LLP (Deloitte) was guilty of professional misconduct for breaching duties of confidentiality - Deloitte, in addition to appealing the sanctions imposed, asserted that the appeal tribunal erred in (1) its determination of what constituted confidential information and (2) by unreasonably misapprehending the nature of the charges and the evidence before it - The Alberta Court of Appeal held that the reasonableness standard of review applied to both grounds of appeal - See paragraphs 11 to 19.

Cases Noticed:

New Brunswick (Board of Management) v. Dunsmuir, [2008] 1 S.C.R. 190; 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [paras. 11, 78].

MacDonald Estate v. Martin and Rossmere Holdings (1970) Ltd., [1990] 3 S.C.R. 1235; 121 N.R. 1; 70 Man.R.(2d) 41, refd to. [para. 14].

Gray, Administrator of MacDonald Estate - see MacDonald Estate v. Martin and Rossmere Holdings (1970) Ltd.

Martin v. Gray - see MacDonald Estate v. Martin and Rossmere Holdings (1970) Ltd.

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 25].

Hay et al. v. University of Alberta and Sterns et al. (1990), 105 A.R. 276; 73 Alta. L.R.(2d) 391 (C.A.), refd to. [paras. 43, 100].

Vancouver Community College v. Phillips, Barratt (1987), 20 B.C.L.R.(2d) 289 (S.C.), refd to. [paras. 43, 99].

Blank v. Canada (Minister of Justice), [2006] 2 S.C.R. 319; 352 N.R. 201; 2006 SCC 39, refd to. [para. 44].

Canada Southern Petroleum Ltd. et al. v. Amoco Canada Petroleum Co. et al. (1995), 168 A.R. 137; 28 Alta. L.R.(3d) 85 (Q.B.), refd to. [para. 45].

Canada Southern Petroleum Ltd. et al. v. Amoco Canada Petroleum Co. et al. (1995), 168 A.R. 140 (Q.B.), refd to. [para. 45].

Ryan v. Law Society of New Brunswick, [2003] 1 S.C.R. 247; 302 N.R. 1; 257 N.B.R.(2d) 207; 674 A.P.R. 207; 2003 SCC 20, refd to. [paras. 51, 78].

Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982, addendum [1998] 1 S.C.R. 1222; 226 N.R. 201, refd to. [para. 78].

Dr. Q., Re, [2003] 1 S.C.R. 226; 302 N.R. 34; 179 B.C.A.C. 170; 295 W.A.C. 170; 2003 SCC 20, refd to. [para. 78].

Hay v. Institute of Chartered Accountants (Alta.) (1988), 91 A.R. 60; 63 Alta. L.R.(2d) 217 (C.A.), refd to. [para. 80].

College of Physicians and Surgeons (Ont.) v. Gillen (1993), 64 O.A.C. 83; 13 O.R.(3d) 385 (C.A.), refd to. [para. 91].

Opron Construction Co. v. Alberta (1989), 100 A.R. 58; 71 Alta. L.R.(2d) 28 (C.A.), refd to. [para. 93].

Blank v. Canada (Minister of Justice), [2006] 2 S.C.R. 319; 352 N.R. 201; 2006 SCC 39, refd to. [para. 93].

Ramirez et al. v. Brander et al., [2007] A.R. Uned. 671; 2007 ABQB 729, refd to. [para. 93].

Guitierrez v. Jeske (2005), 385 A.R. 62; 2005 ABQB 953, refd to. [para. 93].

Flinn v. McFarland et al. (2002), 211 N.S.R.(2d) 201; 662 A.P.R. 201; 2002 NSSC 272, refd to. [para. 93].

L., Re, [1997] A.C. 16; 195 N.R. 344 (H.L.), refd to. [para. 94].

Edmonton (City) v. Lovat Tunnel Equipment Inc. et al. (2000), 260 A.R. 126; 79 Alta. L.R.(3d) 246; 2000 ABQB 111, refd to. [para. 94].

N.M. v. Drew Estate (2003), 330 A.R. 233; 299 W.A.C. 233; 18 Alta. L.R.(4th) 42; 2003 ABCA 231, refd to. [para. 94].

Phillip v. Whitecourt General Hospital et al. (2001), 290 A.R. 228; 92 Alta. L.R.(3d) 321 (Q.B.), refd to. [paras. 95, 100].

Stanton v. Callaghan, [2000] 1 Q.B. 75 (C.A.), refd to. [para. 96].

National Justice Compania Naviera S.A. v. Prudential Assurance Co.; Ship Ikarian Reefer, Re, [1993] 2 Lloyd's Rep. 68 (Q.B.), refd to. [para. 41].

Ship Ikarian Reefer, Re - see National Justice Compania Naviera S.A. v. Prudential Assurance Co.; Ship Ikarian Reefer, Re.

Myers v. Elman, [1940] A.C. 282 (H.L.), refd to. [para. 96].

Stoodley v. Ferguson, [2001] A.R. Uned. 477; [2001] 8 W.W.R. 329; 93 Alta. L.R.(3d) 78 (Q.B.), refd to. [para. 100].

Authors and Works Noticed:

Alberta, Institute of Chartered Accountants, Combined Rules of Professional Conduct and Related Guidelines Handbook, Section E, pp. 703 [para. 20]; 704 [para. 21]; 705 [para. 29]; 708 [para. 22]; 710 [para. 21]; rules 201.1, 202, 205, 207 [para. 66]; 208.1 [paras. 22, 32, 66]; 208.2 [paras. 32, 66]; 208.3 [para. 66].

Counsel:

R.G. McLennan, Q.C., and S.W. Chambers, for the appellant;

S.L. Hunka, for the respondent.

This appeal was heard on April 11, 2008, before Picard, Hunt and Slatter, JJ.A., of the Alberta Court of Appeal. The judgment of the court was delivered on May 9, 2008, including the following opinions:

Picard, J.A. (Hunt, J.A., concurring) - see paragraphs 1 to 52;

Slatter, J.A., dissenting - see paragraphs 53 to 110.