Gowlings, acting for Philip Services Corp. and its lenders in a
lawsuit against the former auditors of Philip, successfully argued
at the Ontario Court of Appeal that section 61 of the Chartered
Accountants Act, 2010 (the "Act"), which prohibits
the admissibility of records of a discipline proceeding of the
Institute of Chartered Accountants in a civil proceeding, does not
operate retrospectively to discipline proceedings concluded before
the Act came into force.
Section 61 of the Act provides as follows:
No record of a proceeding under this Act and no document or
thing prepared for or statement given at such a proceeding and no
decision or order made in such a proceeding is admissible in any
civil proceeding, other than a proceeding under this Act or a
judicial review relating to a proceeding under this Act.
The Motions Judge had found that section 61 of the Act operated
to bar the Plaintiffs from pleading the facts related to
disciplinary proceedings by the Institute of Chartered Accountants
against an audit partner of the Defendants. The disciplinary
proceedings at issue related to the very audits giving rise to the
civil action. The Plaintiffs sought to rely on the
disciplinary proceedings to make an argument for issue estoppel.
The Motions Judge had found that although the wording of section 61
suggested that it should apply prospectively, it was an entirely
procedural provision, and so was presumptively retrospective,
despite the clear language to the contrary.
The Court of Appeal overturned the decision of the Motions
Judge. Justice Doherty concluded that "[t]he section
means what it says."1 He found that
section 61 is a rule of evidence, and therefore
procedural. However, he held that "the presumption of
immediate application" did not assist "in stretching the
words 'a proceeding under this Act' beyond their plain
meaning."2 Section 61 has no effect on the
admissibility in civil proceedings of documents relating to
discipline proceedings before the Act came into force.
Justice Doherty further held that the purpose of the provision
would not be met if the section were to be applied
retrospectively. He explained that while "putative
complainants will be encouraged to come forward by the knowledge
that section 61 will apply to any complaints they make," there
was no need for the provision to apply backwards to a time
"when complainants knew that material relating to the
complaints process could find its way into evidence in civil
The Court of Appeal decision is significant as it clarifies that
in interpreting a statutory provision, the plain meaning of the
language used will trump presumptions of statutory
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