Executive Summary: Key Legal and Evidentiary Issues

• Judith Cluney, a self-employed CPA registered under the Chartered Professional Accountants and Public Accountants Act, SNL 2014, c. C-10.1, appealed a May 12, 2023 CPANL Adjudication Tribunal finding of professional misconduct for failing to cooperate with a practice review investigation.
   
• Central to the appeal was whether the Adjudication Tribunal applied the correct legal test for "failure to cooperate" under Rule 104.2 of the CPA Rules of Professional Conduct, which requires a registrant to promptly produce documents when required to do so.
   
• Disputed on appeal was the applicable standard of review — correctness versus palpable and overriding error — with the court ultimately applying the deferential standard for questions of mixed fact and law.
   
• Cluney argued the Tribunal failed to consider her personal and family difficulties as evidence of a good faith explanation for her delay in producing the ten requested client files.
   
• Evidence in the record showed that by the time the Practice Review Report was completed — five months after the review was ordered — three of the ten requested files had still not been provided, and those three files remained outstanding at the appeal hearing.
   
• A third issue arose as to whether the Tribunal erred in finding that the Complaints Authorization Committee had granted Cluney the six-week extension she had requested on September 20, 2021.
   

Facts of the case

Judith Cluney ("Cluney") was a self-employed CPA, CA since 1992, registered under the Chartered Professional Accountants and Public Accountants Act, SNL 2014, c. C-10.1. She operated a public accounting practice since 2010, primarily comprised of compilation engagements and working with physicians as a chartered professional accountant. On May 12, 2023, following a hearing and merits decision of the CPANL Adjudication Tribunal (the "CPANL Tribunal"), she was found guilty of professional misconduct deserving of sanction in relation to several allegations. On July 31, 2023, the CPANL Tribunal imposed various sanctions on Cluney based on its findings in the Merits Decision (the "Sanctions Decision"). Cluney appealed the findings of the Merits and Sanctions Decisions in their entirety and sought they be quashed. The present decision concerns only the appeal of the Merits Decision, with the appeal of the Sanctions Decision — which also includes the subsequent CPANL Tribunal decision of December 16, 2024 — to be addressed separately (matter 202501G0370).

The appeal focused solely on the Adjudication Tribunal's finding of professional misconduct in relation to Cluney's failure to cooperate with its Practice Review Investigation. Cluney's legal counsel conceded that the Adjudication Tribunal Record showed Cluney had missed deadlines established by the Complaints Authorization Committee (the "CAC"), but argued this was not determinative of whether she had failed to cooperate overall. He contended the determination of uncooperativeness required consideration of all circumstances, including Cluney's personal situation, her requests for extensions, and the CAC's handling of those requests. During the CAC investigation, Cluney had been addressing a personal and family crisis that began prior to the commencement of the practice review. She did her best to complete the CAC requests and completed most of them prior to the submission of the Practice Review Report. The CAC had been made aware of her personal and family difficulties.

Policy and legislative provisions at issue

The governing legislation is the Chartered Professional Accountants and Public Accountants Act, SNL 2014, c. C-10.1. Under section 43, an appeal from an adjudication tribunal decision may be filed with the Trial Division within 30 days of receiving notice of the decision. Rule 104.1 requires a registrant to co-operate with the regulatory processes of CPA Newfoundland and Labrador. Rule 104.2 requires a registrant to promptly produce documents when required to do so by CPA Newfoundland and Labrador. The Guidance to Rule 104 clarifies that lack of co-operation includes attempts to delay, mislead, or misdirect CPA Newfoundland and Labrador by concealing relevant information, providing false, incomplete or misleading statements or information, failing to respond to communications, or otherwise obstructing the regulatory process — but it does not include good faith assertions of legal privilege. The Guidance further states that requests for reasonable extensions will not normally be refused, however repeated requests without adequate grounds will be refused.

Reasoning and analysis

Justice Browne determined that the applicable standard of review for the issues on appeal was palpable and overriding error, as the question of whether Cluney failed to cooperate is one of mixed fact and law. This standard — drawn from Gulliver v. Law Society of Newfoundland and Labrador, 2024 NLCA 23 and Law Society of Saskatchewan v. Abrametz, 2022 SCC 29 — requires correctness for pure questions of law and palpable and overriding error for questions of fact or mixed fact and law. To constitute a palpable and overriding error, the mistake must go to the root of the challenged finding of fact such that the fact cannot survive.

On Issue #2 (whether the Tribunal erred in finding Cluney guilty on Charge 1 in file 21-088), the court found there was ample evidence from the Tribunal Record that Cluney did not cooperate with CPANL's regulatory processes. The Adjudication Tribunal's detailed chronology of events ran from September 2, 2021 to January 10, 2022. Once the decision to conduct a Practice Review was made, the reviewer contacted Cluney directly and requested the immediate production of 10 client files. Cluney requested a six-week extension, which was granted with the proviso that she appear before the CAC on October 14, 2021. At that appearance, Cluney informed the CAC there was no reason why the Practice Review could not proceed without further delay. She appeared before the CAC again on November 1, 2021, and requested a second extension, which was granted until November 16, 2021, by which time only 7 of the 10 requested files were received. Cluney continued to promise to send the remaining 3 files between November 22, 2021, and January 4, 2022, but did not do so. The Practice Reviewer, Blair Jewer, completed his investigation and issued his Practice Review Report on January 10, 2022. By that time — five months after the Practice Review was ordered — three of the ten requested files had still not been provided, and those three files remained outstanding at the appeal hearing. Justice Browne found that Cluney's personal and family difficulties had no bearing on her ability to produce the records requested, and that the purpose of a Practice Review is not to allow a member time to put their records in better order before producing them for inspection.

On Issue #3 (whether the Tribunal erred in finding the CAC had provided Cluney the six-week extension she requested on September 20, 2021), Cluney's counsel argued there was no evidence in the Tribunal Record to support such a finding, making it an unreasonable error. The court, however, accepted CPANL's position that paragraph 23 of the Merits Decision referred only to the result of Cluney's appearance before the CAC on October 14, 2021 — following which an interview date was set — and was not a finding of fact that the six-week extension had been formally granted. Justice Browne found no palpable and overriding error on this ground either.

Ruling and overall outcome

The appeal was dismissed. The Adjudication Tribunal Merits Decision finding that Cluney committed professional misconduct by failing to promptly produce documents as required under Rule 104.2 of the Chartered Professional Accountants and Public Accountants Act was upheld and remains undisturbed. CPANL, as the successful respondent, was awarded costs on a Column III basis, with no specific dollar amount stated in the decision.