Executive Summary: Key Legal and Evidentiary Issues

• Judith Cluney appealed a decision of the CPANL Adjudication Tribunal concerning the sanction imposed following a finding of professional misconduct, specifically the suspension and subsequent revocation of her licence to practise.
   
• Central to the appeal was whether the CPANL — rather than the Adjudication Tribunal — had statutory authority under section 39 of the Chartered Professional Accountants and Public Accountants Act, SNL 2014, c. C-10.1 to suspend or revoke a member's licence for non-compliance with a sanctions order.
   
• The Court found that the Adjudication Tribunal, not the CPANL, holds exclusive statutory authority under section 39 to determine non-compliance and to issue suspension or revocation orders, and that this authority could not be delegated to the CPANL.
   
• Disputed was whether the word "clients" in the Sanctions Decision was ambiguous: Cluney argued it referred only to public accounting clients, while the Adjudication Tribunal and the Court found it carried its plain and ordinary meaning — all persons to whom she provided services.
   
• Evidence on the record, including communications from client Sarah Clancy, supported the finding that Cluney had clients as of July 31, 2023, and failed to provide the required client list.
   
• Despite finding a statutory error in the Adjudication Tribunal's process, the Court dismissed the appeal, satisfied the same outcome would have been reached had the proper section 39 application procedure been followed.

Facts of the case

Judith Cluney ("Cluney") is a member of the Association of Chartered Professional Accountants of Newfoundland and Labrador ("CPANL"). Following a finding of guilt in Court file 202301G4136, the CPANL Adjudication Tribunal imposed sanctions on Cluney by written decision dated July 31, 2023 (the "Sanctions Decision"). The sanctions included a written reprimand to be placed on Cluney's CPANL file; a requirement that she provide CPANL with a list of her current clients within ten days of the Decision and Order; the appointment of a Monitor by CPANL for a period of twelve months to perform periodic random reviews of her files and report to CPANL; publication of a summary of the Decision and Order to Cluney's current clients, all CPANL members, and all provincial and territorial accounting regulatory bodies; and a fine of $2,500.00 along with costs in the amount of $15,000.00. The Sanctions Decision further provided that if Cluney failed to comply with its terms, her CPANL membership would be suspended until she complied, and that should non-compliance persist for more than 30 days following suspension, her membership would be revoked. CPANL asserts Cluney did not comply with the Sanctions Decision, and on January 8, 2025, it suspended her membership in accordance with the directive in the Sanctions Decision. Cluney subsequently filed a Notice of Appeal seeking to set aside the Adjudication Tribunal's decision of December 16, 2024, and a certiorari quashing her suspension and subsequent revocation.

Policy and legislative provisions at issue

The central legislative provision at issue is section 39 of the Chartered Professional Accountants and Public Accountants Act, SNL 2014, c. C-10.1 (the "Act"), under the sub-heading "Failure to comply." Section 39(1) provides that on application by the board to the disciplinary panel, an adjudication tribunal may make an order suspending the rights and privileges of a respondent where it determines that the respondent has failed to comply with a decision or an order under subsection 35(2) or 36(3). Section 39(2) states that the parties to the application are the board and the respondent. Section 39(3) provides that an order of an adjudication tribunal under this section may suspend the rights and privileges of the respondent for a fixed period, or until conditions which it may impose are fulfilled, or until further order of the adjudication tribunal. Also relevant is section 36(3) of the Act, which sets out the powers of an adjudication tribunal upon a finding of guilt, including the authority to suspend or direct the surrender of a member's certificate or licence. Cluney argued that section 39 required a fresh application by CPANL to the Adjudication Tribunal before any suspension or revocation for non-compliance could be imposed, and that the Act neither expressly nor implicitly permitted the CPANL to make a unilateral determination of non-compliance. CPANL countered that the Adjudication Tribunal had already made a suspension and revocation order under section 36 in the body of the Sanctions Decision, rendering a further section 39 application superfluous.

Reasoning and analysis

Justice Browne applied the correctness standard of review to the statutory interpretation question, as both parties agreed this was a question of law. Using the modern rule of statutory construction — reading words in their entire context, in their grammatical and ordinary sense, harmoniously with the scheme of the Act and the intention of Parliament — the Court analyzed the interplay between sections 36(3) and 39. Justice Browne accepted Cluney's position that section 39 anticipates an inter partes hearing process in which a member would be entitled to lead evidence and argue the merits of any possible suspension or revocation arising from a previous order under section 36(3). The Court found there was no wording in the Act contemplating an ex parte application by the CPANL to suspend or revoke for failure to comply, or the use of a prospective order by the Adjudication Tribunal during a sanctions hearing to sidestep a hearing under section 39. Accordingly, the Court concluded that the Adjudication Tribunal — not the CPANL — is the body seized with the statutory authority to determine non-compliance, and that this authority could not be delegated to the CPANL. The Adjudication Tribunal had therefore erred in its interpretation of section 39. The Court then turned to whether Cluney had, in fact, complied with the Sanctions Decision, applying the palpable and overriding error standard to this question of mixed fact and law. It rejected Cluney's argument that the word "clients" in the Sanctions Decision was ambiguous and referred only to public accounting clients. Applying the plain and ordinary meaning of the word, and noting that section 2(f)(ii) of the Act — which excepts persons who engage only in bookkeeping or cost accounting from the definition of public accounting — did not render the Sanctions Order itself ambiguous, the Court found that "clients" meant all persons to whom Cluney provided services. The evidentiary record, including email exchanges between Cluney and Gregory White, CPA, CA, CGA on September 20 and 21, 2023, a November 29, 2023 email introducing White to client Sarah Clancy, and a text message exchange in which Clancy indicated she felt deceived by Cluney, supported the conclusion that Cluney had clients as of July 31, 2023 and had failed to provide the required client list. The Court determined that had the proper section 39 procedure been followed, the Adjudication Tribunal would inevitably have reached the same conclusion.

Ruling and overall outcome

The appeal was allowed in part in the sense that the Court found the Adjudication Tribunal erred in its interpretation of section 39 of the Act by permitting the CPANL to act unilaterally in suspending and revoking Cluney's licence. However, because the evidentiary record demonstrated that Cluney had failed to comply with the Sanctions Decision and the same outcome would inevitably have resulted from a proper section 39 application, Justice Browne dismissed the appeal and declined to grant a remedy. CPANL was the successful party on the ultimate disposition. In light of the unique outcome of the appeal, the Court made no order as to costs.