Why volunteering to resign won’t necessarily allow you to avoid discipline

An accountant who volunteered to resign from his profession to avoid a disciplinary hearing has been denied relief by Alberta’s Court of King’s Bench.

In Sturt v Chartered Professional Accountants of Alberta, 2022 ABKB 801, the Court dealt with whether the Chartered Professional Accountants of Alberta (the “CPA Regulator”) was obliged to accept a registrant’s offer to resign from practice in return for avoiding disciplinary proceedings. Sturt, the accountant, was being investigated for allegedly misappropriating funds from a former client.

Registrants and regulators often enter into “sanctions agreements” that can involve the registrant voluntarily resigning from practice in exchange for avoiding a disciplinary hearing. Agreements of this nature are generally within the discretion of the regulatory body, which must consider the appropriateness of the settlement in the circumstances, weighing the necessity to protect the integrity of the disciplinary process and promoting public confidence in the regulator.

Registrant offered to resign without admitting wrongdoing

In Alberta, the Chartered Professional Accountants Act, SA 2014, c 10.2 (the “Act”) allows for sanction agreements but mandates that they include an admission of unprofessional conduct by the registrant. Sturt’s offer involved no such admission of guilt. Rather, he offered to resign from the CPA Regulator and to never again practise as a professional accountant. The CPA Regulator rejected the proposal. Sturt then applied to the Court, seeking to prevent the CPA Regulator from moving forward with the disciplinary hearing.

Sturt  argued that the CPA Regulator’s insistence on an admission of guilt created “a substantial risk that [he] will give a false confession in order to secure an end to the disciplinary proceedings against him.” This, combined with the costs associated with defending himself and the physical and mental stress a disciplinary hearing may have caused, premised Sturt’s argument that his rights under the Canadian Charter of Rights and Freedoms were in jeopardy if the hearing were to continue.

Legislation requires an admission of guilt

Applying the tripartite test for injunctive relief set out in RJR-MacDonald v Canada (Attorney General), 1994 CanLii 177 (SCC), the Court found no merit to Sturt’s arguments, resulting in no serious issue to be tried. The Act requires an admission of guilt for Sturt to avoid disciplinary proceedings. Even if the CPA Regulator had discretion to override this requirement, there were no special circumstances weighing in favour of such discretion being applied here. Noting jurisprudence on the topic, the Court reaffirmed that disciplinary hearings should be permitted to proceed notwithstanding potential Charter rights that may be asserted in due course in the proceedings.

In finding that Sturt did not meet the other two injunctive requirements (i.e., irreparable harm and the balance of convenience), the Honourable Justice Michalyshyn found, in part, that “having voluntarily entered into and enjoyed the benefits of the regulated profession of accounting, Mr. Sturt cannot now avoid the obligation of participating in a disciplinary hearing.”

This case is a reminder that a registrant’s offer to resign rather than face discipline will not always result in avoiding discipline. The statutory scheme and principles related to a disciplinary body’s obligation to act in the public interest (see: Law Society of Saskatchewan v Abrametz, 2022 SCC 29) are paramount.

The MLT Aikins Regulated Professionals practice group has extensive experience advising regulated professionals and professional regulatory bodies on disciplinary proceedings. Learn more at our Discipline Panel Essentials: Self-Represented Litigants and Non-Governable Persons webinar.

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.