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DISCIPLINE COMMITTEE PANEL
Gerry DeSorcy, P.Eng., Chair
Mike Berezowski, P.Eng.
Allin Folinsbee, P.Geoph.
Panel Counsel
Dwayne Chomyn, Neuman Thompson
PARTIES
APEGGA Investigative Committee
Barry Massing
Hendrickson Gower Massing Olivieri
Member
Blair Longdo, P.Eng.
Member's Counsel
Raymond Coad and Philip LaFlair,
Fraser Milner Casgrain
BACKGROUND
On November 30, 2000, the Discipline Committee received,
from the Investigative Committee, the referral for a discipline
hearing concerning Mr. Blair Longdo, P.Eng. (the "Member").
The Discipline Committee responded and requested that the
Investigative Committee provide particulars of the matters
to be heard. The charges were received December 21, 2000.
After obtaining the availability of all necessary parties,
a hearing date of May 8, 2001 was set.
On February 26, 2001, the Discipline Committee issued a
formal notice of hearing and served copies on the Member
through his counsel, Mr. Coad and on the Investigative Committee
(the "parties"). At the same time, the Discipline
Committee, according to its standard process for disclosure
of documents, 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 March 2001, Mr. Coad applied for an adjournment that
the Investigative Committee did not oppose and a new hearing
date of October 17, 2001 was set. In September 2001, Mr.
Coad applied for another adjournment that the Investigative
Committee did not oppose and a new hearing date of November
21, 2001 was set. In October 2001, the Investigative Committee
applied for an adjournment because its key witness was not
available. Mr. Coad did not object and a new hearing date
of May 29, 2002 was set. In May 2002, the Investigative Committee
again applied for an adjournment for the same reason. Mr.
Coad did not object and a hearing date of November 20, 2002
was set. The Investigative Committee's third application
in July 2002 was for the same reason as the previous two.
Again, Mr. Coad did not object, and a new hearing date of
April 15, 2003 was set.
THE HEARING
The hearing was held before the Panel at the Association’s
offices in Calgary on April 15, 2003 and reconvened on April
16, 2003 via video conference between APEGGA's Edmonton and
Calgary offices. The Investigative Committee was represented
by Mr. Massing. The Member was represented by Mr. LaFlair.
On October 21, 2003, a teleconference was held to resolve
a production issue. On October 23, 2003, we released a decision
on that point which is attached to this decision as Appendix "A".
As well, certain documents were produced in the course of
those proceedings, which we hereby enter into evidence and
the record. The hearing was reconvened and concluded on November
17, 2003 in the Calgary APEGGA offices.
CHARGES (ALLEGATIONS)
As noted in the notice of hearing, the matters to be decided,
as brought by the Investigative Committee before the Panel,
are:
1. Whether or not Blair Longdo made adequate and proper
disclosure to NCE Resources Group of his shareholding interest
in the Predator Corporation while employed by or consulting
to NCE Resources Group between November, 1995 and February,
1997, and while participating in the evaluation of the Laprise
and Valhalla properties on behalf of NCE Resources Group;
2. Whether or not Blair Longdo made adequate and proper
disclosure to NCE Resources Group of his shareholding interest
in 649567 Alberta Ltd. while employed by or consulting to
NCE Resources Group between November, 1995 and February,
1997, and while participating in the evaluation of the Laprise
property on behalf of NCE Resources Group and which property
649567 Alberta Ltd. held an interest in during the same time;
3. Whether or not Blair Longdo’s conduct in this matter
constitutes a violation of APEGGA Code of Ethics, in particular
Rules of Conduct #’s 4, 5 and 10.
THE FINDINGS AND REASONS
There was one issue raised during the hearing, particularly
in closing argument, which relates to and has the potential
to impact on the Panel’s findings and reasons on each
of the charges, but is not specifically dealt with in the
charges. That issue relates to the motivation of NCE Resources
Group in bringing forward to the Association of Professional
Engineers, Geologists and Geophysicists of Alberta (APEGGA)
the complaint against Mr. Longdo.
Mr. LaFlair, counsel for Mr. Longdo, took the position that
a commercial dispute occurred between NCE and his client,
court proceedings were initiated, negotiations went on for
about one and one-half years, and then a settlement was reached.
He suggested that NCE didn’t like the settlement, so
immediately brought a complaint to APEGGA, primarily for
reasons of spite.
Mr. LaFlair suggested that this background impacted the
testimony of NCE witnesses and raised doubts as to the credibility
of their evidence. He indicated that if NCE was really interested
in the behavior of Mr. Longdo as a member of the profession,
it would have filed the complaint earlier. In his view, APEGGA
should not allow itself to be used as a weapon of revenge.
Mr. Massing on behalf of the Investigative Committee, and
witnesses from NCE, disagreed with Mr. LaFlair's position.
The NCE witnesses indicated that filing a complaint with
APEGGA had not occurred to them throughout the negotiation
process. Indeed, according to NCE, they had registered the
complaint primarily because doing so was suggested by one
of their Advisory Board members, who had formerly been a
president of APEGGA.
The Panel believes there is little to be gained by attempting
to impute a motive to a party that brings a complaint to
APEGGA. Indeed, it questions whether such motive is relevant.
What does matter is that a complaint was filed, the Investigative
Committee carried out an extensive investigation, and on
the basis of that investigation it decided to bring charges.
The Panel must now evaluate those charges on the basis of
all of the evidence placed before it.
The Panel does acknowledge that the motive for registering
a complaint could, in some circumstances, impact on the credibility
of some of the evidence put forward by some of the witnesses.
So could many other factors.
The evidence placed before the Panel was given under oath.
It was tested by cross-examination and clarified by questions
from the Panel and its counsel. The veracity of that evidence
must now be judged by the Panel as it weighs the evidence
and reaches conclusions respecting the charges.
The findings of the Panel with respect to the charges are
as follows.
1. With respect to item 1 above:
The Panel believes that the first charge raises two questions
that it must address. The first is whether Mr. Longdo made
adequate disclosure respecting his interests in Predator.
The other is whether he participated in a significant manner
in the evaluation of the Laprise and Valhalla properties.
Mr. Longdo claims to have informed Mr. Errico of NCE of
his interests in Predator on at least two occasions. The
first was on December 29, 1995 when he had been offered full
time employment by NCE. He states that he met with Mr. Errico
and informed him of the situation because of concern for
a possible conflict of interest. He provided a copy of handwritten
notes from his diary, although they appeared to be written
on the wrong date in the diary.
Mr. Longdo claims to have made a full disclosure, including
considerable detail. Mr. Errico claims he did not, but says
he may have mentioned something about his father’s
interests in certain properties. The diary notes indicate
that Mr. Longdo told Mr. Errico his father had purchased “part
of Predator”, that “he might leave NCE to go
to Predator in future”, and that he would “eventually
buy shares in Predator”.
Mr. Longdo said the matter also came up when he was asked
by Mr. Errico to evaluate a Laprise property in mid to late
January, 1996. According to Mr. Longdo, Mr. Errico asked
him to do so because he had an ownership interest in and
knowledge of the property. Mr. Errico denied requesting the
review by Mr. Longdo for that reason.
In assessing the evidence, the Panel is prepared to accept
that Mr. Longdo likely raised the matter with Mr. Errico
in late December, 1995. However, it cannot conclude that
the disclosure was as detailed as Mr. Longdo claimed in his
evidence. If it was, the Panel believes Mr. Errico would
have been fully aware of it, and would have raised it with
others at NCE long before the fall of 1997 when NCE became
aware of it through other events. For the same reason, that
is that Mr. Errico appears to have been unaware of Mr. Longdo’s
interest in Predator until the fall of 1997, the Panel doubts
Mr. Longdo’s claim that he was asked to evaluate the
Laprise property because of his ownership interest in it.
Had that happened, surely Mr. Errico would have been at that
time, and would have remained, fully aware of Mr. Longdo’s
interest in Predator.
Additionally, the Panel notes that Mr. Longdo’s own
diary entry, which he claims to have made in December, 1995,
states he “would eventually buy” in reference
to his father's interest in Predator. Other evidence, confirmed
by Mr. Longdo, indicates that, in fact, the deal had been
made, it was being delayed by tax considerations, and he
actually acquired the interest on January 2, 1996. This,
in the view of the Panel, indicates that any disclosure he
made to Mr. Errico was not totally forthright.
Finally, the Panel notes that throughout 1996 and 1997,
after Mr. Longdo had left NCE and NCE had purchased Predator,
Mr. Longdo went out of his way to avoid acknowledging to
anyone at NCE, his interests in Predator or the numbered
company.
All these things cause the Panel to conclude that although
Mr. Longdo may have made some mention to Mr. Errico of his
father’s interests in Predator, it was not an adequate
and proper disclosure.
In terms of Mr. Longdo’s participation in the evaluation
of the Laprise and Valhalla properties, essentially all of
the evidence indicates some degree of involvement. He prepared
an Economic Synopsis and Recommendation to Drill at Valhalla
dated December 12, 1995. In September 1996 he also prepared
a Reserves Assessment and Economic Evaluation, and signed
certain AFEs related to Valhalla. By his own evidence, he
says Mr. Errico asked him to do an evaluation in Laprise
(because of his ownership and knowledge), and that he did
so. Also, one of Mr. Longdo’s invoices to NCE made
reference to working on “Predator”.
Having regard for all of the evidence, even though the Panel
recognizes that Mr. Longdo was only one of several who were
involved, that his work was subject to review by his superiors
and the Advisory Board, and that all actions of NCE also
required an independent (outside) evaluation, the Panel concluded
that Mr. Longdo was involved in a significant manner in the
evaluation of the Laprise and Valhalla properties. At the
same time, it found no evidence to demonstrate that he prejudiced
his evaluations or other work in favour of his or his family's
ownership interests, as they existed while he was doing the
work.
The Panel finds that Mr. Longdo did not make adequate and
proper disclosure to NCE Resources Group of his shareholding
interest in the Predator Corporation while employed by or
consulting to NCE Resources Group between November, 1995
and February, 1997, and that during that time, he participated
in the evaluation of the Laprise and Valhalla properties
on behalf of NCE Resources Group.
2. With respect to item 2 above:
In assessing this charge, the Panel again believes it must
address two questions. The first relates to whether or not
there was adequate disclosure. The second relates to the
degree of Mr. Longdo’s involvement in the evaluation
of Laprise properties.
With respect to Mr. Longdo’s interest in the numbered
company, he stated that he disclosed this matter to Mr. Errico
in November, 1995. He says Mr. Errico asked him why his invoices
for consulting were from a numbered company. According to
Mr. Longdo, his response included that the numbered company
owned an interest in the Laprise property. Mr. Errico indicated
that he had no recollection of a conversation that included
a reference to Laprise.
The Panel has considerable doubt as to whether Mr. Longdo
would have included a reference to Laprise in a response
as to why he was billing for his consulting services through
a numbered company. The matters seem unrelated. In any case,
it would not consider such a reference, while dealing with
an unrelated mater, adequate disclosure.
The Panel also notes that when Predator was sold to NCE
and when royalty payments were due to the numbered company,
Mr. Longdo took care not to inform NCE of his interest in
the numbered company. This went so far as to include temporarily
transferring his ownership in the numbered company to a third
person. He offered several explanations for this at different
times, including that he was going to be away on holidays
when the deal was finalized and that he did not want Mr.
Newcommon of NCE to know of his involvement in the numbered
company for fear it would impact the deal. The Panel does
not accept this and believes it was part of the ongoing effort
by Mr. Longdo to hide his ownership interests in the numbered
company.
It might be suggested that the disclosures claimed to have
been made by Mr. Longdo on his interests in Predator are
related to and in an indirect manner disclosed his interests
in the numbered company. The Panel has previously presented
its findings respecting the adequacy of his disclosure regarding
Predator. The Panel has also concluded in the earlier section
that Mr. Longdo was involved in a significant manner in the
evaluation of the Laprise properties.
The Panel finds that Mr. Longdo did not make adequate and
proper disclosure to NCE Resources Group of his shareholding
interest in 649567 Alberta Ltd. while employed by or consulting
to NCE Resources Group between November, 1995 and February,
1997, and that during that time he participated in the evaluation
of the Laprise property on behalf of NCE Resources Group
and which property 649567 Alberta Ltd. held an interest in
during the same time.
3. With respect to item 3 above:
The third charge specifically refers to Rules of Conduct
#4, 5 and 10. Rules 4, 5 and 10 of the Code of Ethics, as
it existed at the time of the actions dealt with in this
proceeding, are as follows:
Rule 4. Professional engineers, geologists and geophysicists
shall act for their clients or employers as state code agents
or trustees and shall always act independently with fairness
and justice to all parties.
Rule 5. Professional engineers, geologists and geophysicists
shall not engage in activities or accept remuneration for
service rendered that may create a conflict of interest with
their clients or employers without the knowledge and consent
of their clients or employers.
Rule 10. Professional engineers, geologists and geophysicists
shall conduct themselves towards other professional engineers
geologists and geophysicists and towards employees and others
with fairness and good faith.
The Panel believes that its findings with respect to items
1 and 2 lead to a conclusion that Mr. Longdo breached Rule
of Conduct 4. However, even though it believes his actions
were such that they may have created a conflict of interest,
it found insufficient evidence to prove that in his involvement
in the evaluation of the subject properties, he did not act
or conduct himself with fairness and justice and good faith.
The Panel believes that Mr. Longdo’s conduct in this
matter constitutes a violation of the APEGGA Code of Ethics,
in particular Rule of Conduct # 5.
1. Mr. Longdo did not adequately disclose his shareholding
interests in Predator Corporation nor in 649567 Alberta Ltd.
to NCE Resources Group while employed by that corporation.
2. During this time he participated on behalf of NCE in
the evaluation of properties in which Predator Corporation
and 649567 Alberta Ltd. held an interest.
ORDERS
On January 12, 2004, the Discipline Committee Panel’s
written findings and reasons were issued to Mr. LaFlair,
on behalf of Mr. Blair Longdo, and the Investigative Committee.
In its letter, the Panel requested that the parties provide
their submissions in writing on the matter of the orders
to be made.
Both parties provided submissions in accordance with the
procedure outlined by the Panel in its letter. Mr. Massing,
on behalf of the Investigative Committee, forwarded a submission
dated January 16, 2004 recommending sanctions and summarizing
its costs. On January 27, 2004, Mr. LaFlair submitted his
response on behalf of Mr. Longdo. Mr. Massing submitted a
reply on January 29, 2004.
On February 2, 2004 the Panel requested that the Director
of Professional Practice (the Director) provide information
on the costs associated with the hearing. The Director wrote
to the parties on February 2, 2004, indicating the costs
that his office had determined and noting that he would provide
a copy of that letter to the Panel on February 9, 2004 along
with any comments either party wished to make. Neither party
submitted a response.
In considering the appropriate orders, the Panel notes that
at various times throughout the process, Mr. Longdo appeared
to not be totally forthcoming. One example of this is that
Mr. Longdo initially gave one reason for not revealing his
interest in the subject properties. As the process went forward,
Mr. Longdo changed that reason.
Another example related to Mr. Longdo’s involvement
in the Valhalla property. Much of his evidence indicated
that he had no involvement other than to drill a well. However,
the Panel had before it a report authored by Mr. Longdo that
included an economic analysis and a recommendation to drill
a well. Additionally, copies of invoices indicated that Mr.
Longdo had billed for time on the Valhalla property before
any drilling took place.
These occurrences suggest that Mr. Longdo did not take his
obligations as a professional, nor the importance of the
process and its potential ramifications, as seriously as
he should have. Indeed, throughout much of the process, he
appeared to reflect a reluctance to fully cooperate with
the APEGGA process.
Having regard for its findings, the above noted considerations,
and the submissions on sanctions made by both of the parties,
the Panel believes that substantive sanctions, including
costs, a fine, and publication with name, are warranted.
The Panel makes the following orders:
1. Mr. Longdo shall be reprimanded for unprofessional conduct.
2. Mr. Longdo shall, within six months of these Orders being
served on him, successfully complete the Professional Practice
Exam.
3. Mr. Longdo shall pay to APEGGA costs of $25,117.50, which
represent the full costs of the hearing, and such costs are
to be paid within 60 days of the date of these Orders being
served on him.
4. Mr. Longdo shall pay a fine of $5,000.00 to APEGGA, such
fine to be paid within 60 days of the date of these Orders
being served on him.
5. If Mr. Longdo fails to comply with Orders 2, 3 and 4
above, his registration in APEGGA shall be suspended until
Orders 2, 3 and 4 above are complied with.
6. The matter shall be published in The PEGG, with Mr. Longdo’s
name.
DATED this 29th day of March, 2004 at Calgary, Alberta.
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Gerry DeSorcy, P.Eng.
Chair, Discipline Hearing Panel
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