Friday, July 3, 2009

Denial of hearing upheld by Court of Appeal

The Ontario Court of Appeal recently ruled on the issue of whether a not-for-profit professional regulatory corporation had dealt fairly with one of its members against whom a complaint had been made.

In an appeal brought by the Appraisal Institute of Canada, the entity that regulates and sets standards of practice for real estate appraisers, the Court of Appeal overturned a trial judgment that awarded damages to a member of the Institute on the basis that its discipline committee had not dealt fairly with him. In the case, a hearing of the institute's adjudicating committee determined that certain charges had been proven against the member. The committee imposed a private reprimand, ordered the member to re-do the appraisal in issue in compliance with current standards and assessed costs of $2,500 against him.

The member appealed to the Ontario Superior Court of Justice and succeeded at trial. The trial judge found that the Institute had an implied contractual obligation to treat the member fairly in conducting its discipline process. The trial judge found that the process had become fatally flawed at the investigating committee stage because the member had been denied a right to a hearing.

The Court of Appeal overturned the decision for the following reasons:

1. The implied contractual obligation of fairness must be informed by the regulation which the Institute's by-laws empower it to make governing the investigating stage of the discipline process. In other words, the regulation sets out how members can expect to be treated. In this case, the regulation provided that the investigating committee was not required to hold a hearing.

2. The investigating committee could impose no sanction or substantive consequence on the member. It could do no more than cause a hearing before the adjudicating committee. As a result, the requirements of the duty to treat the member fairly at the investigating stage were extremely minimal. The member was afforded the opportunity to know what the complaint was against him and to respond in writing about the questions the complaint raised. The Court held that fairness requires no more than that.

The Court concluded that the absence of a hearing before the investigating committee did not deprive the member of any element of procedural fairness.



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