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 theChartered 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 proceedings.”3

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 interpretation.