April 2006 ISSUE
APEGGA DISCIPLINE COMMITTEE DECISION
Date of Hearing: September 1 & 2, 2004
Date of Decision: February 23, 2005
IN THE MATTER OF the Engineering, Geological and Geophysical Professions
Act
— and —
IN THE MATTER OF the conduct of Alan M. Blackie, P.Geol., regarding
a review of Associated Mining Consultants Ltd. reports.
HEARING PANEL
Gerry DeSorcy,
P.Eng., Chair
Mike Berezowski,
P.Eng.
Dave Evans,
P.Geol.
Counsel and staff
Dwayne Chomyn,
Discipline
Committee Counsel
Ray Chopiuk,
P.Eng.,
Director Professional
Practice
APPEARANCES
Investigative Committee
Barry Massing,
Investigative
Committee Counsel
Leo Flaman,
P.Eng.
Complainants
Robert T.
Holland
Alan L. Craven,
P.Eng.
Keith McCandlish,
P.Geol.
Member
Alan M. Blackie,
P.Geol.
Thomas E.
Valentine,
Macleod Dixon,
Counsel to
Mr. Blackie
D.R.
Rowe, P.Eng.
BACKGROUND
On August 7, 2002, Mr. Craven and Mr. McCandlish of Associated Mining Consultants
Ltd. (AMCL) filed a letter of complaint with APEGGA alleging that Mr. Blackie
had breached the APEGGA Code of Ethics in the preparation of a report (the Blackie
Report) entitled:
An Examination of Professional Practice Under the Code of Ethics Issued by the Association of Professional Engineers, Geologists and Geophysicists of Alberta.
An Expert Opinion Regarding the February 2001 Technical Audit Conducted by Associated Mining Consultants Ltd Into Certain of the Operations of Birch Mountain Resources Ltd.
On September 11, 2002, Mr. Holland also filed a letter of complaint related to the same report and also alleging that Mr. Blackie had contravened the Code of Ethics.
On March 25, 2004, the Discipline Committee received, from the Investigative Committee, the referral for a discipline hearing concerning Mr. Blackie, along with the particulars of the matters to be heard (the charges). After determining the availability of all necessary parties, hearing dates of July 6 and 7, 2004 were set.
On April 14, 2004, the Discipline Committee issued a formal notice of hearing and served copies on Mr. Blackie and on the Investigative Committee. In accordance with its standard process for disclosure of documents, the Discipline Committee requested that the parties provide to the Panel and to each other, copies of documents on which they intended to rely at the hearing.
In his letter of May 14, 2004, Mr. Valentine applied for an adjournment, which the Investigative Committee opposed. Both parties presented their submissions before the Panel via a telephone conference call on June 21, 2004. The Panel subsequently granted the adjournment, and new hearing dates of September 1 and 2, 2004, were set.
THE HEARING
The hearing was held before the Panel at the Association’s offices in Calgary
on September 1 and 2, 2004. Closing arguments were in written form and filed
in accordance with an agreed-to schedule, with the final submission made on September
30, 2004.
THE CHARGES (ALLEGATIONS)
As stated in the notice of hearing, the matters to be decided, as brought by
the Investigative Committee before the Panel, are directed to A.M.Blackie, P.Geol.,
and are as follows:
“That you prepared a report of a professional nature, dated September 26, 2001, entitled ‘Examination of Professional Practice under the Code of Ethics Issued by The Association of Professional Engineers, Geologists and Geophysicists of Alberta’, which report included a review of the reports of Associated Mining Consultants Ltd., dated January 2, 2001 and February 8, 2001 and which report did not meet acceptable professional standards in the following respects:
1. That your said report attributed ulterior motives to Associated Mining Consultants Ltd. based on conclusions you reached that were not justified and which were predicated on errors of fact, thereby constituting unskilled practice of the profession or unprofessional conduct and contravention of APEGGA Code of Ethics Rule of Conduct #10.
2. That your said report did not consider all relevant information resulting in a biased report, thereby constituting unskilled practice of the profession or unprofessional conduct and constituting a contravention of APEGGA Code of Ethic Rules of Conduct #2 and #10.
3. That your training and experience did not qualify you to offer opinions on the technical matters contained in the Associated Mining Consultants Ltd. reports, thereby constituting unskilled practice of the profession or unprofessional conduct and constituting a contravention of APEGGA Code of Ethics Rule of Conduct #2.
4. That your said report made allegations of breach of confidentiality by Associated Mining Consultants Ltd. which could not be substantiated, thereby constituting unprofessional conduct and a breach of APEGGA Code of Ethics Rule of Conduct #10.
5. That your said report unjustifiably impugned the character or professional reputation of others, including AMCL, K. McCandlish, P.Geol., A.C. Craven, P.Eng., and R.T. Holland, thereby constituting unprofessional conduct and a contravention of APEGGA Code of Ethics Rule of Conduct #10.
6. That you formed an opinion in your report that you knew or ought to have known was based on limited and biased information and thereby lost your independence from your client in contravention of APEGGA Code of Ethics Rule of Conduct #4.”
FINDINGS AND REASONS
The complaints arose from certain activities related to a mining company, Birch
Mountain Resources Ltd. (Birch). The Canadian Venture Exchange (CDNX) ordered
a halt to the trading of Birch shares in June 2000 and launched an independent
audit to determine whether or not a Birch press release had contravened public
disclosure requirements. Upon Birch agreeing to a clarifying news release and
to an independent audit, trading was resumed in September 2000. The audit was
conducted by AMCL. The audit concluded that Birch had contravened the disclosure
rules of the CDNX and on February 27, 2001 the CDNX again suspended trading in
Birch shares.
Birch then engaged MacLeod Dixon to assist them with the appeal of the CDNX
suspension order. MacLeod Dixon engaged Mr. Blackie, P. Geol., to review the
AMCL Technical Audit Report to assess whether the report contained any violations
of APEGGA’s
Code of Ethics. Mr. Blackie’s report was critical of the technical audit
performed by AMCL and was included in a written submission on behalf of Birch
in support of an Application for Review before the Listed Company Review Panel
(LCRP).
The LRCP concluded that there was “…from our point of view the
basis for an apprehension of bias within the Exchange…”. It therefore
ruled that the matter should not be reviewed by the CDNX. The matter was scheduled
for a review hearing, but before it took place, CDNX and Birch reached a settlement.
Subject to conditions specified by the CDNX and agreed to by Birch, share trading
was reinstated in March 2002.
The use of Mr. Blackie’s report before the LRCP Hearing Panel resulted in it being made public and coming to the attention of AMCL and Mr. Robert Holland, who subsequently filed the subject complaints.
Prior to dealing with the specific charges, there are two issues that the Panel believes it should address. The first relates to the fact that Mr. Blackie commented on certain matters contained in the draft AMCL report even though they were changed in the final report. Mr. Massing contended that he should only have commented on the final report and suggested that Mr. Blackie included comments on the draft report simply to have more points of which to be critical.
The Panel notes that Mr. Blackie’s assignment was to express an opinion as to the conduct of AMCL relative to APEGGA’s Code of Ethics. The Panel believes that the content of the draft report, prior to any comment from Birch or others and resulting charges, would be relevant in terms of the assignment. It therefore attaches no inference to the fact that Mr. Blackie dealt with the draft in his report.
Another matter relates to the issue of privilege between Mr. Blackie and
his client. The Panel accepts that when Mr. Blackie prepared his report it was
a privileged communication between he and McLeod Dixon. The Panel further accepts
that Mr. Blackie was of the understanding that if his report was used in a litigation
process, an application would be made to have the file sealed.
The charges make reference to the APEGGA Code of Ethics, Rules of Conduct #2,
#4 and #10. They are as follows:
2. Professional engineers, geologists and geophysicists shall undertake only work that they are competent to perform by virtue of training and experience and shall express opinions on engineering, geological or geophysical matters only on the basis of adequate knowledge and honest conviction.
4. Professional engineers, geologists and geophysicists shall act for their clients or employers as faithful agents or trustees and shall always act independently and with fairness and justice to all parties.
10. Professional engineers, geologists and geophysicists shall conduct themselves toward other professional engineers, geologists and geophysicists and towards employers and others with fairness and good faith.
Charge 1: That your said report attributed ulterior motives to Associated Mining Consultants Ltd. based on conclusions you reached that were not justified and which were predicated on errors of fact, thereby constituting unskilled practice of the profession or unprofessional conduct and contravention of APEGGA Code of Ethics Rule of Conduct #10.
Mr. Blackie’s position was that the AMCL report reflected “selective editing” of certain references and statements to avoid inclusion of evidence supportive of Birch’s position. Even when such an example was drawn to AMCL’s attention after the first draft, it simply deleted reference to the matter. Mr. Blackie concluded that AMCL was not being “independent and fair” and took the position he was acting appropriately in being critical of AMCL.
The Investigative Committee stated that it takes no issue with Mr. Blackie’s
noting of certain deletions but argued that attributing of motive to AMCL was
improper in the absence of evidential support.
The Panel agrees with Mr. Blackie that certain of the editing carried out by
AMCL appeared to selectively avoid anything supportive of the Birch position.
It also recognizes that certain other evidence may have suggested that either
or both of Mr. Holland and AMCL were, as a minimum, skeptical about the assertions
of Birch early in the audit process before meaningful work had been conducted.
However, in the view of the Panel, such evidence falls short of clearly demonstrating
ulterior motives on the part of AMCL.
The APEGGA Code of Ethics requires that professional members conduct themselves toward other members in fairness and good faith. Although the Panel accepts that Mr. Blackie may well have had reasons to be concerned about the practices of AMCL, the attribution of ulterior motives to AMCL, and the relatively strong language used in doing so, was not acting in good faith towards AMCL. The evidence Mr. Blackie had before him, in the judgment of the Panel, did not justify the attribution of ulterior motives. The Panel therefore finds Mr. Blackie guilty of Charge 1, particularly because of the seriousness of the allegations and the strength of the language used by Mr. Blackie.
Charge 2: That your said report did not consider all relevant information resulting in a biased report, thereby constituting unskilled practice of the profession or unprofessional conduct and constituting a contravention of APEGGA Code of Ethic Rules of Conduct #2 and #10.
The Investigative Committee took the position that Mr. Blackie did not have all of the relevant information before him and therefore could not support his conclusions. Mr. Blackie’s position was that he reviewed all of the information provided to him and that this was the basis of his opinion. Mr. Blackie was only able to review that information provided him by his client. The Panel is satisfied that he did so and formed certain opinions. It therefore disagrees with the charge that he did not consider all relevant information; he considered all he had. Charge 2 is dismissed.
Charge 3: That your training and experience did not qualify you to offer opinions on the technical matters contained in the Associated Mining Consultants Ltd. reports, thereby constituting unskilled practice of the profession or unprofessional conduct and constituting a contravention of APEGGA Code of Ethics Rule of Conduct #2.
The Investigative committee took the position that Mr. Blackie’s report included a number of technical assessments even though he stated in his report that “I do not understand all of the technical issues raised in this matter”. Mr. Blackie’s position was that his report was not expressing technical opinions on scientific matters.
The Panel is satisfied that Mr. Blackie’s identification of the “technology which is central to …” Birch’s operations, his conclusions that “…there was no technical basis…” for certain views expressed by Mr. Holland, and his conclusions regarding the expertise and qualifications of AMCL and its consultants, are all statements that suggest technical competence on his part, even though he states he is not offering technical opinions. The Panel therefore believes that Mr. Blackie has breached Rule of Conduct #2 as alleged in Charge 3. In stating this conclusion, it is important that the Panel make clear that it does not believe that Mr. Blackie took on work of which he was incapable. Rather, in carrying out his assignment, he strayed somewhat into technical areas where his competence was somewhat in question.
Charge 4: That your said report made allegations of breach of confidentiality by Associated Mining Consultants Ltd. which could not be substantiated, thereby constituting unprofessional conduct and a breach of APEGGA Code of Ethics Rule of Conduct #10.
The Investigative Committee appears to base this charge primarily on the fact that Mr. Blackie did not fully quote a particular section of the Confidentiality Agreement. The Panel reading of that Agreement is such that it understands how Mr. Blackie could conclude that AMCL had breached the confidentiality arrangement. It therefore does not consider an allegation that it did so to be contrary to fairness and good faith. The Panel therefore dismisses Charge 4.
Charge 5: That your said report unjustifiably impugned the character or professional reputation of others, including AMCL, K. McCandlish, P.Geol., A.C. Craven, P.Eng., and R.T. Holland, thereby constituting unprofessional conduct and a contravention of APEGGA Code of Ethics Rule of Conduct #10.
The Panel is satisfied that Mr. Blackie’s conclusion that AMCL did not carry out the audit in an independent manner and its attribution of ulterior motives to AMCL, as discussed under Charge 1, was not acting in fairness and good faith to other professionals. It therefore concludes that he unjustifiably impugned their reputations as alleged in Charge 5. The Panel recognizes that Mr. Blackie may have considered that his opinion would be held in complete confidence, but this does not justify the unsupported attribution of ulterior motives to another professional.
Charge 6: That you formed an opinion in your report that you knew or ought to have known was based on limited and biased information and thereby lost your independence from your client in contravention of APEGGA Code of Ethics Rule of Conduct #4.
The Panel, as stated under charge 2, is satisfied that Mr. Blackie reviewed all of the information provided to him and formed certain opinions. It is not satisfied that he knew or ought to have known that there may have been other relevant information available. However, charge 6 also relates to the use of biased information and the loss of independence from the client.
The Panel is satisfied, on the basis of all of the evidence before it that Mr. Blackie appears to have fallen prey to an allegation he made against others, that is the loss of independence from his client. The Panel can understand that Mr. Blackie, on the basis of his review of the information provided him, could have seen cause for concern in the professional practices of AMCL and Mr. Holland. Mr. Blackie seems to have reacted to this by taking on a role as an advocate for his client. For example, he used a selective editing process to emphasize points he was making, and attributed motives as discussed earlier. In doing this, he lost independence from his client, as alleged in charge 6.
Summary
The Panel finds that Mr. Blackie breached the APEGGA Code of Ethics with respect
to charges 1, 3, 5 and 6. It dismisses charges 2 and 4.
ORDERS
On November 4, 2004 the Discipline Committee Panel’s written findings and reasons were issued to the complained against Member and to the Investigative Committee. In its letter, the Panel indicated that it would receive written submissions from the parties on the matter of the orders to be made.
The Panel received an initial submission dated November 5, 2004 from Mr. Massing on behalf of the Investigative Committee. Mr. Valentine’s response, on behalf of Mr. Blackie, was dated December 3, 2004, and Mr. Massing replied in writing on December 9, 2004. In his first submission, Mr. Massing acknowledged that the subject investigation and findings do not relate to the technical competence of the member. Rather they take issue with the member’s comments regarding the conduct of some of his professional colleagues. He also noted that Mr. Blackie’s prior professional career has been exemplary and reflects significant volunteer service to APEGGA.
He went on, however, to recommend:
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That Mr. Blackie be reprimanded.
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That Mr. Blackie successfully complete the Professional Practice Examination within six (6) months of the issuance of the Order, failing which his registration be suspended until the Professional Practice Examination is successfully completed.
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That Mr. Blackie’s practice be restricted, such that he not render opinions on a fee for service basis regarding the APEGGA Code of Ethics for a period of two (2) years from the date of this Order.
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That Mr. Blackie be assessed costs of the Hearing in such amounts as the Discipline Committee deems appropriate.
Mr. Valentine argued that several of the complaints against Mr. Blackie were found to be without merit by the Investigative Committee. Further, two of the charges brought by the Investigative Committee were unsubstantiated and dismissed outright. A number of the other charges were reduced in severity by the Discipline Panel. He therefore contended that any sanction imposed by the Discipline Panel be less onerous than the sanctions proposed by the Investigative Committee.
Mr. Valentine submitted that the most appropriate sanction would be in the form of a discharge in favour of Mr. Blackie with an award of costs in favour of Mr. Blackie in the amount of $10,000, granted pursuant to Section 63 (k) of the Act.
In response, Mr. Massing argued that section 64 of the Engineering, Geological and Geophysical Professions Act makes it clear that the Discipline Committee may only order that “…the investigated person pay…the costs of the Hearing”. He stated that there is neither jurisdiction, nor authority, for the Discipline Committee to order costs against the Investigative Committee.
The Panel subsequently requested the Director of Professional Practice to provide information on the costs associated with the hearing. The Director wrote to the parties on December 20, 2004 indicating the costs that his office had determined and noting that he would provide a copy of that letter to the Panel on January 7, 2005 along with any comments either party wished to make. Both parties made comments, and their letters of January 7th and January 12th were also provided to the Panel.
Considering all of the evidence presented to date and recognizing that Mr. Blackie was not found guilty on all of the charges brought forward by the Investigative Committee and that those charges he was found guilty of were not of the most serious nature, the Panel orders as follows:
1. Mr. Blackie shall be reprimanded for unprofessional conduct.
2. Mr. Blackie is required to successfully complete the Professional Practice Examination within six (6) months of the date this decision is served on him.
3. Mr. Blackie is required to pay to the Association, within 60 days of the date this decision is served on him, costs in the amount of $5,000 being some 20% of the costs of the hearing.
4. If Mr. Blackie fails to comply with Orders 2 and 3, his registration shall be suspended until he complies with those Orders.
DATED this 23rd day of February, 2005 at Calgary, Alberta.
Discipline Hearing Panel
NOTE
This decision appears in The PEGG in accordance with an APEGGA Council policy
that requires publication, with names. This applies in all cases unless the Investigative
Committee, the Discipline Committee or the Appeal Board orders against publication
and provides reasons.