Following today's decision, Engineering New Zealand has today vowed to reopen complaints against Reay.
Chief executive Susan Freeman-Greene says her thoughts today are with those who lost loved ones in the CTV Building tragedy.
"We stopped our investigation in 2014 because Dr Reay had resigned as a member," she said.
"We appreciate the Court's direction that our decision was wrong. We welcome the clarity the judge has provided.
"Today's decision means the complaints process will be reopened. Our first step will be making contact with the people involved."
Reay issued a media statement this afternoon to say he is taking on advice on whether he should appeal today's decision to the Court of Appeal.
He says he resigned his Ipenz membership for reasons "entirely unrelated to the complaint"
"Dr Reay has always rejected the claims in the complaint," the statement says.
"On four occasions he gave evidence to the CTV inquiry and called expert evidence as well. Apart from this complaint, all other complaints against Dr Reay have been dismissed, including one by ENZ against his as a Chartered Professional Engineer which wholly failed on its merits.
"The CTV building disaster could have been avoided as the evidence to the Royal Commission showed.
"That tragedy haunts Dr Reay every day, as it does many others. He has done everything he personally can to identify what happened and how we can ensure that it will not occur again. This has included funding independent research and investigation.
"However, Dr Reay refuses to be scapegoated for this tragedy. Dr Reay will not be issuing any further comment at this time."
Earlier, Justice Collins said it was in the public interest to allow Ipenz to determine whether or not it wishes to proceed with a complaint against Reay.
"Whilst it would not be possible to expel or suspend Dr Reay from the Institution, that is not determinative," he said.
"There may be valuable lessons to be learnt from an assessment of Dr Reay's professional responsibilities in relation to the collapse of the CTV Building that can only be resolved through a disciplinary process."
However, the judge stressed that it was up for Ipenz to consider whether it goes ahead with the action.
"This judgment is not a direction that the disciplinary proceeding against Dr Reay must continue," Justice Collins concluded.
Reay's company Alan Reay Consultants was responsible for designing the six-storey Christchurch office block that collapsed in the magnitude-6.3 February 22, 2011 quake.
A Royal Commission of Inquiry into the Canterbury earthquakes criticised Reay for giving his inexperienced structural engineer David Harding "sole responsibility" for the building's mid-1980s design.
Professor Maan Alkaisi, whose wife Maysoon Abbas died in the collapse, last month accused Ipenz of "the worst example of double standards" by punishing Harding but not taking any action against Reay.
"This was in spite of the fact that both were members of Ipenz, both resigned before the disciplinary action, and both had the same responsibilities in the design of the CTV Building," said Alkaisi, spokesman for the CTV Families Group.
"Not only is this hearing about accountability but it is also about public safety – the need to send a strong message to the construction industry and practising engineers."
The chief engineer for Ministry of Business, Innovation and Employment (MBIE) made a complaint to Ipenz about Reay's involvement in the CTV Building in 2012.
But Reay resigned his voluntary membership of the institute in February 2014 while the professional body was investigating the complaint and later decided not to pursue any disciplinary action against him. Ipenz concluded it no longer had jurisdiction to deal with a former member.
A September 2014 decision by the High Court relating to Harding ruled that an investigation and disciplinary hearing could continue even when a member resigned.
Last year, a long-awaited police probe concluded that no criminal charges would be laid despite "significant" design deficiencies.
In 2015, the Attorney-General filed for a judicial review of the Ipenz decision.
"It is important that we clarify the law as to whether a professional can avoid disciplinary proceedings by simply resigning," then Building and Housing Minister Dr Nick Smith said in March 2015.
"Completing the Ipenz investigation will also be important in clarifying the professional standards expected of a senior engineer supervising the work of a more junior engineer."
Engineering New Zealand, as Ipenz is now called, has previously said it would abide by whatever decision the court makes.
