DIVISIONAL COURT FILE NO.: 218/20
DATE: 20211026
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
PATTILLO, PENNY AND KURKE JJ.
BETWEEN:
THE ASSOCIATION OF PROFESSIONAL ENGINEERS OF ONTARIO
Appellant
– and –
JOHN P. PELOW and PELOW ENGINEERING
Respondents
Leah Price and Sandy Lockhart, for the Appellant
J. Michael Hickey, for the Respondents
HEARD by Videoconference: March 23, 2021
Introduction
[1] The Appellant, the Association of Professional Engineers of Ontario (“APEO”), appeals from the majority decision of its Discipline Committee (the “Committee”) dated August 7, 2020 awarding the Respondents, John Pelow, P.Eng. and Pelow Engineering (together “Pelow”), $35,000 in costs as a result of the Committee’s earlier unanimous decision dismissing all allegations of professional misconduct against them.
[2] The appeal concerns the interpretation and application of s. 28(7) of the Professional Engineers Act, RSO 1990, c. P.28 (the “Act”) which provides:
s. 28(7) Where the Discipline Committee is of the opinion that the commencement of the proceedings was unwarranted, the Committee may order that the Association reimburse the member of the Association or the holder of the certificate of authorization, temporary licence, provisional licence or limited licence for the person’s costs or such portion thereof as the Discipline Committee fixes.
[3] For the reasons that follow, I would allow the appeal. In my view, in awarding Pelow costs of the proceeding, the majority of the Committee erred in its interpretation and application of s. 28(7) of the Act.
Background
[4] The Act provides for a Complaints Committee (the “COC”) whose role is to consider and investigate complaints concerning the conduct or actions of a member or licensee (s. 24(1)). In accordance with the information it receives, the COC may: i) refer the matter in whole or part to the Committee; ii) direct that the matter not be referred; and iii) take such action as it considers appropriate in the circumstances and that is not inconsistent with the Act, the regulations or by-laws (s. 24 (2)).
The COC
[5] In this case, the COC received complaints concerning the conduct of Pelow from the Chief Building Official of Loyalist Township (“CBO”). The COC investigated and referred some but not all of the complaints to the Committee resulting in the APEO charging Pelow with three counts of professional misconduct pursuant to Regulation 941under the Act: negligence (s. 72(2)(a)); failure to comply with applicable statutes, regulations, standards, codes, by-laws and rules (s. 72(2)(d)); and engaging in conduct or an act relevant to the practice of professional engineering that would reasonably be regarded as disgraceful, dishonourable conduct or unprofessional conduct (s. 72(2)(d)).
[6] The charges related to two residential projects in Bath, Ontario: the proposed construction of a two-tiered deck proposed to be built at the rear of a residence (the “Deck Project”) and the proposed application of a stone cladding product called Fusion Stone to the front of a residence to a height of three feet (the “Fusion Stone Project”).
[7] When the owners each applied to the Township for a building permit for the two Projects, the Building Department raised engineering concerns resulting in the owners retaining Pelow. In response, Pelow submitted brief letters to the Building Department in respect of each Project, in essence saying that the structures could withstand the superimposed loads. The CBO took issue with Pelow’s response and retained Mr. Chris Roney, P.Eng. to review the responses.
[8] With respect to the Deck Project, Mr. Roney stated that Pelow’s letter was brief and he would have expected “a reasonable and prudent practitioner would have included some additional information so that the report could be properly understood and interpreted.” He concluded, “the report and calculations are in error and do not demonstrate compliance with the requirements of the Ontario Building Code 2012.” Mr. Roney also found Pelow’s response concerning the Fusion Stone Project to be problematic.
[9] As a result of Mr. Roney’s reports, the CBO filed complaints with the APEO.
[10] As required by s. 24 of the Act, Pelow was invited to respond to the complaints. After a long delay, Pelow responded by indicating that Loyalist Township did not support the complaint and included a letter from a municipal councillor and a homeowner complaining about perceived problems with the service levels of the Building Department.
[11] As part of its investigation, in addition to the Roney reports, the COC retained Mr. Robert Holroyd, P.Eng. to review the Projects. In respect of the Deck Project, Mr. Holroyd concluded that Pelow’s proposal was incorrect and his calculations “did not meet the industry standards of what is expected of a reasonable and prudent practitioner.” With respect to the Fusion Stone Project, while he found Pelow’s initial letter reasonable but lacking justification, he was critical of Pelow’s response and concluded that his behaviour did not meet the industry standard of what is expected of a reasonable and prudent practitioner.
[12] Pelow provided a brief response to the engineering issues raised by Messrs. Roney and Holroyd in which he provided no engineering justification or analysis to the criticisms raised.
[13] On February 14, 2018, the COC issued its decision referring the commplaints in respect of the Fusion Stone and Deck Projects to the Discipline Committee. The decision attached a detailed Statement of Allegations which set out the parties, the facts in respect of each of the Projects, including Pelow’s responses and the independent expert opinions of Holroyd. It concluded with the specified allegations of professional misconduct under s. 72(2)(a), (d) and (j) of Regulation 941 under the Act in respect of alleged failures to meet the Ontario Building Code.
The Discipline Committee
[14] The Discipline Committee, comprised of a panel of five members (four engineers and a lawyer), heard the matter over three days in November 2018. In addition to the CBO, the APEO called two experts: Mr. Roney and Mr. Holroyd. Mr. Roney testified as a participant expert in structural engineering, having reviewed both Projects and provided advice to the CBO at the time. Mr. Holroyd testified as an expert in structural engineering based on his review of the Projects.
[15] In response, Pelow called seven witnesses including himself and Mr. John Armitage, P.Eng. who provided an expert opinion based on his review of the Projects. Pelow also called the homeowner of the Fusion Stone Project and the contractor in connection with the Deck Project. As part of their defence to the charges, Pelow raised what they alleged was the CBO’s improper motivation behind making the complaints.
The Liability Decision
[16] In detailed Reasons for Decision dated June 6, 2019, the Panel unanimously found that Pelow had not engaged in professional misconduct and dismissed all of the charges.
[17] The Panel’s reasons set out the charges, the background behind them and reviewed in detail the evidence in respect of each of the Projects. In particular, the Panel found:
The motivation behind the complaints was not relevant to its decision which involved the appropriate standard of engineering applicable to smallscale projects;
With respect to the Fusion Stone Project:
i. Pelow’s letter to the Building Department, “however brief”, did not contravene the Ontario Building Code;
ii. Pelow met the minimum standard for a professional engineer having regard to safeguarding the public welfare and considering the nature of the Fusion Stone installation. In reaching that conclusion, the Committee did not accept the opinions of the APEO’s two experts with respect to the standard of a prudent professional engineer in circumstances where Pelow was providing services for individuals engaged in small scale projects.
iii. While it noted that Pelow’s letter to the Building Department was “very brief” and could have been improved by providing the information he and the homeowner testified to, it did not rise to the level of professional misconduct.
- With respect to the Deck Project:
i. The Panel noted the difference in approach between the APEO’s experts and Pelow with respect to the engineering solution for the deck and concluded that a difference of opinion between engineers is common but does not constitute professional misconduct;
ii. Based on Pelow’s experience and onsite observations, his opinion that the proposed deck would not exceed the load that was supportable by the piers without “big foot” footings was “soundly formed” and sufficient to comply with the Ontario Building Code;
iii. While the Panel found that Pelow’s use of an “unjustified factor” in his calculations was “inappropriate”, it was not sufficient to constitute professional misconduct;
iv. Pelow’s actions with respect to the Deck Project did not jeopardize public safety at any time.
The Costs Decision
[18] Following the Panel’s decision on liability, Pelow sought their costs of the hearing (initially $40,000, reduced in reply to $35,000) from the APEO. Both parties filed written submissions.
[19] In reasons dated August 7, 2020, a majority of the Panel (the “Majority”) allowed Pelow’s claim for costs and awarded $35,000. One member of the Panel issued a minority decision (the “Minority”) denying Pelow’s request for costs.
The Majority Decision
[20] The only issue before the Panel with respect to costs was whether the referral by the COC was “without reasonable justification.” The Majority found, based on its analysis of the evidence before the COC, that there were “several flaws” in the referral by the COC that rendered commencement of the proceedings unwarranted including: the limited scope and cost of the Projects; the lack of small project experience by the independent expert (Holroyd); the questionable motivation of the CBO (the complainant); and a less than thorough investigation. In the Majority’s opinion, “there were insufficient sufficient prima facie evidence before the COC that, if unchallenged, would lead to a conviction.”
[21] In reaching its conclusion that the COC’s referral was unwarranted the Majority relied on PEO v. Balbaa, October 31, 2017, an unreported decision of the Discipline Committee awarding costs to the member. Balbaa determined that the expert relied upon by the COC did not have the appropriate qualifications to render his opinion and the COC should have known that. It also concluded that there were problems with the investigation and specifically the investigator.
[22] In relying on Balbaa, the Majority concluded the COC should have taken into account what it considered to be Mr. Holroyd’s “lack of experience” in evaluating his report which concluded that Pelow did not meet the standards of a reasonable and prudent practitioner and that the APEO investigation failed to confirm basic facts associated with the two Projects.
[23] The Majority concluded that Pelow’s costs should be compensated “in the interests of fairness and to ensure that justice is done when members choose to defend themselves.” It reviewed the costs claimed and were satisfied the $35,000 reasonably reflected the costs incurred by Pelow subsequent to the referral.
The Minority Decision
[24] In denying Pelow’s claim for costs, the Minority found that the information available to the COC, including the complaints and the record before it, raised at least some questions that merited a hearing. It noted that the COC had before it the opinions of two experts, both of which concluded that Pelow’s conduct fell below the applicable standards, which provided the COC with reasonable justification in referring the matter to the Discipline Committee. The Minority concluded, therefore, that it was not unreasonable for the COC to have referred the matter to the Committee.
Jurisdiction and Standard of Review
[25] Pursuant to ss. 33(1) and (3) of the Act, the Divisional Court has jurisdiction to hear an appeal from a decision or order of the Discipline Committee on questions of law, fact or both.
[26] Accordingly, the standard of review to be applied in respect of questions of law is correctness; in respect of questions of fact and mixed fact and law, palpable and overriding error except where the legal principle is readily extricable in which case the standard is correctness. See: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 (S.C.C.), at para. 37 and Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 (S.C.C.).
The Law
[27] As noted, s.28(7) of the Act provides that the Discipline Committee may award costs of a proceeding against the APEO in circumstances where it is of the opinion that commencement of the proceedings was “unwarranted”.
[28] “Unwarranted” has been held to mean: “without reasonable justification, patently unreasonable, malicious, taken in bad faith or for a collateral purpose”: PEO v. Lim, Gazette, May/June 2011 at pp. 90-91.
[29] What must be considered in determining whether a referral is unwarranted is the evidence that was before the COC upon which it made the referral. Evidence of what occurred at the hearing is not relevant: Association of Professional Engineers of Ontario v. Lim, 2011 ONSC 5789 (Div. Ct.).
[30] Further, a referral is warranted if any one element of the allegations, if proved, would have been sufficient for the panel to find that the member and holder had engaged in one of the acts of professional misconduct alleged: Truman v. Association of Professional Engineers of Ontario, 2016 ONSC 472 (Div. Ct.) at para. 17.
The Issues
[31] The APEO submits that in reaching its decision to award Pelow their costs of the proceedings, the Majority erred in law and/or made several palpable and overriding errors by:
Failing to apply the correct test for costs;
Discounting the evidence of Mr. Holroyd;
Failing to consider relevant evidence; and
Taking irrelevant factors into account.
Failed to Apply the Correct Legal Test
[32] The APEO submits that the Majority erred in principle in awarding Pelow their costs of the proceeding by failing to consider the evidence before the COC concerning each of the allegations in the Statement of Allegations regarding Pelow’s alleged failure to comply with the Ontario Building Code.
[33] Rather, the APEO submits that the Majority focused on issues completely extraneous to the allegations including the limited scope and cost of the Projects, lack of broad impact on the public and the absence of any threat to public safety.
[34] I agree with the APEO’s submission. While the Majority acknowledged that only the evidence before the COC should be considered, it is clear from its decision that not only did they fail to do so, they focused on irrelevant considerations as noted above.
[35] In characterizing the complaints as “not primarily about structural engineering but, rather, were questions of communication with building officials and homeowner clients, and investigations conducted by a sole practitioner in a small community”, the Majority focused on Pelow’s defence to the allegations as opposed to the evidence of the allegations before the COC.
[36] In so doing, I find the Majority erred in law.
Mr. Holroyd’s Evidence
[37] Central to the Majority’s decision that the COC’s referral of the complaints was unwarranted is its conclusion that the COC failed to take Mr. Holroyd’s lack of experience into consideration in evaluating his report.
[38] The APEO submits that in reaching that conclusion, the Majority erred by ignoring not only the evidence of Mr. Holroyd’s experience but also the fact that the Panel qualified Mr. Holroyd as an expert at the hearing.
[39] The Majority noted that a review of Mr. Holroyd’s resumé indicates that his experience is based on working in large engineering projects and on large projects. In fact, Mr. Holroyd’s resumé discloses that he had considerable experience in small residential projects.
[40] Further, Mr. Holroyd was qualified as an expert by the Panel to give opinion evidence in respect of the two Projects. No objection was raised to his qualifications either by Pelow or by the Panel. Further, Pelow’s expert had “no issues” with Mr. Holroyd’s report. While the Panel did not accept Mr. Holroyd’s evidence, it was not because he was not qualified but rather because it preferred the evidence of Pelow’s expert.
[41] As noted, in reaching its decision, the Majority relied on Balbaa, a decision of the APEO’s discipline committee awarding costs to the member as a result of the COC’s reliance on an expert report. However, the facts in Balbaa are very different from this case. In Balbaa, the panel refused to qualify the expert as a result of which he did not testify at the hearing. In awarding costs, the panel held that any kind of vetting would have disclosed the expert’s obvious lack of qualifications.
[42] In such circumstances, I consider the Majority’s criticism of the COC’s failure to take Mr. Holroyd’s “lack of experience” into account in evaluating his report to be a palpable and overriding error particularly given it was something the Panel itself did not do when he testified at the hearing and in reaching its decision.
[43] More egregious, in my view, is the fact that in dismissing Mr. Holroyd’s evidence on the basis that he had no experience in small projects, the Majority gave no consideration to and made no mention of Mr. Roney’s opinions which were also before the COC and which also concluded that Pelow failed to meet the standards of a reasonable and prudent practitioner in respect of each Project. Mr. Roney’s evidence becomes particularly relevant given his experience was primarily small project experience. Ignoring Mr. Roney’s evidence is also a palpable and overriding error.
[44] I reject Pelow’s submission that the Majority’s focus on Mr. Holroyd in its decision does not mean it failed to consider Mr. Roney’s evidence in reaching its conclusion. Not only does the Majority’s decision not support such an inference, it gives rise to the opposite conclusion. In setting out the evidence available to the COC, the Majority states that it consisted, in part, of “an expert report” inferring they only considered Mr. Holroyd’s report.
Irrelevant Factors
[45] The APEO further submits that in reaching its decision that the COC’s referral was unwarranted, the Majority further erred by taking into account a number of factors which are wholly irrelevant to the issues under s. 28(7) of the Act including the complainant’s “questionable motivation” and what it considered was a “less than thorough APEO investigation”. I agree.
[46] The Majority referred to evidence before the COC of prior issues between the complainant and Pelow and noted that it undermined the credibility of the complainant “and raises concerns regarding the motivations of the complainant.” However, such a consideration was irrelevant to the COC’s determination as to whether the allegations, if proved, would be sufficient for the panel to find that Pelow engaged in one of the acts of professional misconduct alleged. It is also somewhat surprising given the Panel’s conclusion that motivation was not relevant to its decision.
[47] The Majority also criticized the COC for what it referred to as an incomplete investigation. It stated that the COC failed to confirm basic facts associated with the Projects. The example used was that the investigator’s failure to follow up with the homeowner in the Fusion Stone complaint could have confirmed what arrangements existed.
[48] The reference to “what arrangements existed” is a reference to evidence before the Panel at the hearing. Pelow testified that he had made arrangements with the owner in the Fusion Stone Project to return to the site once the structure had been uncovered in order to confirm that his assumptions were correct. The homeowner testified and corroborated Pelow’s evidence. Unfortunately, however, in his brief response to the COC during its investigation, Pelow made no reference to his arrangement with the homeowner. Had he done so, it might have been incumbent on the investigator to follow up with the homeowner. In the circumstances, however, I do not consider it to be an indication of a “less than thorough investigation.”
Conclusion
[49] For the above reasons, therefore, the appeal is allowed and the Majority decision of the Discipline Committee awarding Pelow its costs of the proceeding is set aside.
[50] The parties have agreed that in the event that the APEO is successful on the appeal, no costs should be awarded. Accordingly, no order as to costs.
L. A. Pattillo J.
I agree _______________________________
M. A. Penny
I agree _______________________________
A. D. Kurke
Released: October 26, 2021
DIVISIONAL COURT FILE NO.: 218/20
DATE: 20211026
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
PATTILLO, PENNY AND KURKE JJ.
BETWEEN:
THE ASSOCIATION OF PROFESSIONAL ENGINEERS OF ONTARIO
Appellant
– and –
JOPHN P. PELOW and PELOW ENGINEERING
Respondents
REASONS FOR JUDGMENT
Released: October 26, 2021