The Court allowed an appeal of a decision of a chambers judge who had struck out the sanctions imposed by the Appellant Institute against the Respondent, an appraiser. The Court found that the chambers judge erred in his finding that the Institute had failed to deal fairly with the Respondent, with respect to its failure to provide the Respondent a hearing at the investigation stage, the participation of the investigator in charge of the file in the disciplinary proceedings, and the fact that the adjudicating Committee received the investigating committee’s report 30 days before it received the Respondent’s brief.

Administrative law – Decisions of administrative tribunals – Real estate appraisal – Real estate appraisers – Disciplinary proceedings – Competence – Penalties and suspensions – Hearings – Fairness; Judicial review – Procedural requirements and fairness

Egerton v. Appraisal Institute of Canada, [2009] O.J. No. 1880, 2009 ONCA 390, Ontario Court of Appeal, May 11, 2009, S.T. Goudge, J.M. Simmons and R.G. Juriansz JJ.A.

The Respondent was a real estate appraiser and a member of the Appellant Institute, designated by it as an accredited appraiser.

In September 1997, the Institute received a complaint from someone for whom the Respondent had prepared an appraisal report. The Institute maintains three committees which each play a part in the process of disciplining a member who has shown to have breached its standards of practice: an Investigating Committee, an Adjudicating Committee, and an Appeal Board. All three committees are established by regulations made pursuant to the Appellant’s bylaws.

The Investigating Committee appointed one of its members to investigate the complaint. That member prepared a brief for the Investigating Committee in which he reported on deficiencies in the Respondent’s Appraisal Report and described the discipline charges that he proposed and that the Committee recommend in light of those deficiencies. He also recommended that the Respondent receive the discipline of “censure” and be required to take some additional courses. The Investigating Committee including the author of the brief, met to consider the complaint against the Respondent. It did not afford the Respondent a hearing or the opportunity to make submissions. The Committee’s report concluded that many, but not all of the charges proposed in the brief warranted discipline, and only those should go forward to the Adjudicating Committee if the Respondent did not agree to the penalties proposed. The Respondent rejected the proposed discipline, which amounted to a private reprimand, some remedial course work and costs of $500.

The Adjudicating Committee held a hearing, as it was required to do by its governing regulation. The Adjudicating Committee found that 9 of the 12 recommended charges had been proven and imposed a private reprimand, ordered the Respondent to redo the appraisal in compliance with current standards and assessed costs of $2,500 against the Respondent.

The Respondent appealed to the Appeal Committee, which held a hearing. The Appeal Committee concluded that only three of the charges had been proven, but sustained the discipline imposed by the Adjudicating Committee save for costs, which were reduced.

The Respondent then appealed to the Court, seeking to quash the decisions of the Appeal and Adjudicating Committees, an order that he be repaid the $1,000 costs he had paid, an injunction preventing further discipline and damages for breach of contract. The Chambers Judge found that the Appellant had an implied contractual obligation to treat the Respondent fairly in conducting its discipline process and that this process had become fatally flawed at the Investigating Committee stage (and thereafter was beyond rehabilitation) because the Respondent had a right to a hearing at that stage and did not receive it. The Chambers Judge ordered that the findings against the Respondent and the sanctions imposed on him be struck, the costs paid be refunded to him, and that he receive costs of the trial fixed at $25,000.

The Institute appealed to the Court of Appeal. It was common ground that the Institute’s relationship with the Respondent was governed by contract and that it owed the Respondent an implied contractual duty of fairness in conducting the various stages of its discipline process. On the principal issue of the propriety of the Respondent not being accorded a hearing before the Investigating Committee, the Court of Appeal found that this did not breach the Institute’s duty to treat the Respondent fairly. The Investigating Committee had proceeded in accordance with its regulation. Moreover, the requirements of the duty of fairness at this preliminary stage (at which the Investigating Committee can impose no sanction or substantive consequence on the Respondent) were extremely minimal. Finally, the Respondent was in fact afforded the opportunity at this stage to know what the complaint against him was and respond in writing – fairness required no more.

The Court of Appeal also considered other considerations raised by the Chambers Judge, including inclusion of the author of the investigative brief on the Investigating Committee, the impact the Investigating Committee report may have had on the final outcome of the discipline process, and the fact that the Adjudicating Committee received the Respondent’s written brief only at the hearing, some 30 days after it received the Investigating Committee’s brief. The Court of Appeal felt that none of these issues amounted to a breach of the Appellant’s duty of fairness.

In the result, the appeal was allowed, the judgment below set aside, and the Respondent’s action dismissed.

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