Law Society of Upper Canada v. Neinstein

85 O.R. (3d) 446

Ontario Superior Court of Justice, Divisional

Court,

Matlow, Swinton and Murray JJ.

March 19, 2007

Professions -- Barristers and solicitors -- Discipline -- Evidence -- Hearing Panel of Discipline Committee not being required to apply decision of Supreme Court of Canada in R. v. W. (D.) in its assessment of credibility of complainants and solicitor -- Failure to follow test in W. (D.) not being fatal to tribunal's decision provided tribunal applies correct burden and standard of proof -- Hearing Panel correctly identifying standard of clear, convincing and cogent evidence -- Appeal Panel erroneously applying standard of correctness rather than standard of reasonableness in reviewing Hearing Panels' conclusions on credibility.

Professions -- Barristers and solicitors -- Discipline -- Penalty -- Hearing Panel of Discipline Committee unreasonably imposing penalty of disbarment for sexual harassment.

The respondent solicitor was alleged to have committed acts of sexual harassment against two former clients, T and D, and a former employee, G. A Hearing Panel of the Discipline Committee of the Law Society found that the allegations in respect of T and G were proved but that the allegations of D were not. The Hearing Panel set out the standard of proof applicable in a disciplinary hearing of a self-governing profession -- namely, that there must be clear and convincing proof of professional misconduct, based on cogent evidence. In assessing the credibility of witnesses, it adapted the test set out by the Supreme Court of Canada in R. v. W. (D.). The Hearing Panel concluded that it "preferred" the evidence of [page447] T and G over that of the solicitor. The Hearing Panel, while observing that the primary sanction imposed for sexual harassment in the past was a suspension, disbarred the solicitor and imposed a $10,000 fine. The Appeal Panel set aside the findings of professional misconduct and the penalty of disbarment and ordered a new hearing, holding that the Hearing Panel had misdirected itself on W. (D.) in that it had adopted a two-step approach and did not consider the third alternative from W. (D.), namely, asking itself whether the solicitor's evidence, although not believed, would prevent the Panel, in the context of the evidence as a whole, from finding clear and convincing proof. The Appeal Panel further found that the Hearing Panel failed to assess credibility properly, erred by giving inadequate reasons, and assessed a penalty that was unreasonable. The Law Society appealed.

Held, the appeal should be allowed in part.

Per Swinton J. (Murray J. concurring): The Appeal Panel applied the wrong standard of review to the Hearing Panel's assessment of credibility and the application of the standard of proof to the evidence. It should have asked itself whether the Hearing Panel's decision was unreasonable. Instead, it reviewed that part of the decision on a standard of correctness. With respect to the issue of penalty, the Appeal Panel properly applied a standard of reasonableness.

The Appeal Panel erred in law in finding that a modified W. (D.) test controls the assessment of credibility of witnesses in the administrative law context. The proceedings before the Hearing Panel were not criminal. The Hearing Panel was not bound to assess the guilt or innocence of the solicitor based on the criminal standard of proof. Rather, the standard of proof was the civil standard of a balance of probabilities. The fact that, given the serious nature of the allegations of professional misconduct, the quality of the evidence required to prove the allegations did not alter the standard of proof. While the reasoning in W. (D.) may be of assistance to a trier of fact faced with an assessment of credibility, the strict application of the test in W. (D.) is not required in the context of disciplinary hearings before administrative tribunals. A failure to follow the test is not fatal, provided the trier of fact applies the correct burden and standard of proof. The Hearing Panel correctly identified the standard of clear, convincing and cogent evidence. Applying the appropriate standard, it held that two of the allegations of professional misconduct had been proved. The Hearing Panel's use of the word "preferred" did not in itself warrant appellate intervention. As G and T and the solicitor gave very different versions of events, it would have been impossible for the Hearing Panel to accept the evidence of G and T without completely rejecting the evidence of the solicitor. The Hearing Panel gave reasons for accepting the versions of G and T. Its decision was a reasonable one on the evidence before it.

The Hearing Panel's reasons could have been more detailed, but the issue was whether the reasons adequately demonstrated the rationale for the Hearing Panel's conclusions on credibility and the standard of proof so as to permit meaningful appellate review of the decision. The reasons met that standard. The order of the Appeal Panel setting aside the Hearing Panel's findings of professional misconduct and ordering a new hearing was set aside.

The Appeal Panel did not err in concluding that the penalty of disbarment was unreasonable. However, it was not appropriate to substitute the penalty of suspension without giving the solicitor an opportunity to challenge its reasonableness.

Per Matlow J. (dissenting): The Hearing Panel should not have applied the rules in W. (D.), even as the rules were adapted by it, and by doing so, it inevitably fell into error which required the Appeal panel to make the order it did. [page448]

APPEAL from the order of the Appeal Panel of the Law Society setting aside the decisions of the Hearing Panel and ordering a new hearing. [page449]

Cases referred to R. v. Sheppard, [2002] 1 S.C.R. 869, [2002] S.C.J. No. 30, 211 Nfld. & P.E.I.R. 50, 210 D.L.R. (4th) 608, 284 N.R. 342, 633 A.P.R. 50, 162 C.C.C. (3d) 298, 50 C.R. (5th) 68, 2002 SCC 26 (sub nom. R. v. Sheppard (C.)); R. v. W. (D.), [1991] 1 S.C.R. 742, [1991] S.C.J. No. 26, 46 O.A.C. 352, 122 N.R. 277, 63 C.C.C. (3d) 397, 3 C.R. (4th) 302, consd Other cases referred to Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817, [1999] S.C.J. No. 39, 174 D.L.R. (4th) 193, 243 N.R. 22; Bernstein and College of Physicians and Surgeons of Ontario (Re) (1977), 15 O.R. (2d) 447, [1977] O.J. No. 2182, 76 D.L.R. (3d) 38 (Div. Ct.); College of Physicians and Surgeons of Ontario v. Gillen (1993), 13 O.R. (3d) 385, [1993] O.J. No. 947 (C.A.), affg (1990), 1 O.R. (3d) 710, [1990] O.J. No. 2280, 42 O.A.C. 173 (Div. Ct.); Devgan v. College of Physicians and Sugeons of Ontario , [2005] O.J. No. 306, 193 O.A.C. 357 (Div. Ct.); Dhawan v. College of Physicians and Surgeons of Nova Scotia, 1998 NSCA 83, [1998] N.S.J. No. 170, 168 N.S.R. (2d) 201 (C.A.); Dr. Q. v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226, [2003] S.C.J. No. 18, 223 D.L.R. (4th) 599, 302 N.R. 34, [2003] 5 W.W.R. 1, 2003 SCC 19, 11 B.C.L.R. (4th) 1; Evans (Re), [2004] Lawnet 4 (Ont. Judicial Council); Kalin v. Ontario College of Teachers (2005), 75 O.R. (3d) 523, [2005] O.J. No. 2097, 198 O.A.C. 201, 254 D.L.R. (4th) 503, 30 Admin. L.R. (4th) 289 (Div. Ct.); Law Society of Upper Canada v. Crozier, [2005] O.J. No. 4520, 203 O.A.C. 176 (Div. Ct.); Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247, [2003] S.C.J. No. 17, 257 N.B.R. (2d) 207, 223 D.L.R. (4th) 577, 302 N.R. 1, 674 A.P.R. 207, 2003 SCC 20, 31 C.P.C. (5th) 1; Nova Scotia Teachers Union v. Nova Scotia Community College, 2006 NSCA 22, [2006] N.S.J. No. 64, 265 D.L.R. (4th) 288 (C.A.); Ontario (Provincial Police) v. Favretto (2004), 72 O.R. (3d) 681, [2004] O.J. No. 4248, 191 O.A.C. 3 (C.A.); R. v. G. (L.), 2006 SCC 17, [2006] 1 S.C.R. 621, [2006] S.C.J. No. 17, 266 D.L.R. (4th) 1; R. v. Krugel, [2000] O.J. No. 354, 143 C.C.C. (3d) 367, 31 C.R. (5th) 314 (C.A.); R. v. Minuskin (2003), 68 O.R. (3d) 577, [2003] O.J. No. 5253, 181 C.C.C. (3d) 542 (C.A.); Stevens and Law Society of Upper Canada (Re) (1979), 55 O.R. (2d) 405, [1979] O.J. No. 4546 (Div. Ct.); Toronto (City) Police Service v. Blowes-Aybar, [2004] O.J. No. 1655, 185 O.A.C. 352 (Div. Ct.); Trotter v. College of Nurses of Ontario, [1991] O.J. No. 348, 44 O.A.C. 302, 25 A.C.W.S. (3d) 1328 (Gen. Div.) Statutes referred to Law Society Act, R.S.O. 1990, c. L.8, ss. 34, 49.38 Rules and regulations referred to Law Society of Upper Canada, Rules of Professional Conduct, Rule 27 Authorities referred to Mackenzie, Gavin, Lawyers and Ethics: Professional Responsibility and Discipline (Toronto: Thomson Carswell, 2006) Rothstein, R., Robert A. Centa and Eric Adams, "Balancing Probabilities: The Overlooked Complexity of the Civil Standard of Proof" (The Law Society of Upper Canada Special Lectures, 10 June 2003), Law Society of Upper Canada, ed., The Law of Evidence (Toronto: Irwin Law, 2004)

J. Thomas Curry and Ryan S. Breedon, for appellant. Brian Greenspan and Seth Weinstein, for respondent.

[1] SWINTON J. (MURRAY J. concurring): -- The Law Society of Upper Canada appeals from the order of the Appeal Panel of the Law Society dated February 10, 2005, in which the Appeal Panel set aside decisions of a Hearing Panel of the Discipline Committee of the Law Society dated November 18, 2003 and June 22, 2004 and ordered a new hearing. The Hearing Panel had found that the respondent, Gary Neinstein, had sexually harassed two individuals and thereby engaged in professional misconduct. It imposed a penalty of revocation and a $10,000 fine.

[2] At issue in this appeal is the correctness of the Appeal Panel's holding that the Hearing Panel erred in law both in its assessment of credibility and in the sufficiency of the reasons given for its decision, as well as the reasonableness of the Appeal Panel's decision that the penalty imposed by the Hearing Panel was unreasonable.

Background Facts

[3] By a Notice of Application dated April 10, 2001, the Law Society initiated a hearing under s. 34 of the Law Society Act, R.S.O. 1990, c. L.8 to determine whether the respondent had engaged in specified acts of professional misconduct. The particulars alleged that he had engaged in sexual harassment of three women, C.T., S.G. and L.D. C.T. was a former client of the respondent between 1988 and in or about 1991, while S.G. was a former employee of his law firm between 1990 and 1993. L.D. was a client in 1998.

[4] The respondent was called to the Bar in 1970. He was 60 years of age when the discipline hearing commenced in 2002. At the time of the hearing, and for many years before that, he practised exclusively as a personal injury litigation lawyer in partnership with others.

[5] At the time of the original hearing, C.T. was 43 years old, had three children and lived in the Niagara Peninsula. As a result of a motor vehicle accident in 1986, she retained another lawyer to seek compensation for her injuries. The respondent was retained by C.T.'s brother T.T. in December 1986 in relation to a separate motor vehicle claim. C.T. attended the initial meeting and on most of the occasions when the respondent met with T.T. During one such attendance in 1988, the respondent agreed to act for C.T. in relation to her claim.

[6] C.T. described the respondent as being "overly friendly" from the time that she first saw him with her brother and [page450] through the period of time when she retained him as her counsel. According to C.T., he told her she was beautiful and made comments about her attire. C.T. testified that after the retainer, the respondent started to touch her inappropriately on a regular basis. Her evidence was that this made her uncomfortable, and she felt intimidated. However, she did not say anything to him because she did not want to lose him as her lawyer.

[7] C.T. testified that on August 8, 1990, in St. Catharines, Ontario, she revealed to the respondent that her marriage was over. After this revelation, the respondent walked with C.T. to a nearby park where they sat on a bench. She testified that while they were sitting there, he put his arm around her, fondled her breasts and began kissing her. At his suggestion, the two went to a nearby hotel where they had a drink and where the respondent's inappropriate behaviour continued in the form of unwanted and suggestive remarks.

[8] C.T. testified that on August 20, 1990, she rented a room at the Park Plaza Hotel in Toronto and, after checking in, attended at the respondent's office. He told her that he knew the name of a retail vendor in Yorkville who might be a prospect for her to sell custom sweaters that she knitted. Apparently the respondent touched C.T. on the leg during that meeting. Later in the day, he telephoned her hotel room and left his number. She returned the call, and the respondent indicated he might stop by her hotel room later. Sometime after 5:00 p.m., he arrived at her hotel room with a bottle of wine. Eventually they had sexual intercourse. The respondent left C.T. two hours later, saying that he was going to bail the husband of a client out of jail. According to C.T., she and the respondent had sexual intercourse on about six other occasions, including at his office. The last act of sexual intercourse took place in December 1990. After C.T. ended the relationship, she testified that she felt vulnerable, humiliated and ashamed. The respondent continued to act inappropriately by touching her, making rude remarks and kissing her.

[9] The respondent denied all [of] C.T.'s allegations. The nature of the furnishings in his office was a contested issue. Evidence was presented by both sides with respect to the existence of a couch in the respondent's office before 1993.

[10] S.G. was a young secretarial assistant at the respondent's law firm from 1990 until 1993, including a period of time in which she was on maternity leave from May 1991 to January 1992. She also became the respondent's client in a personal injury matter.

[11] S.G. described a pattern of incidents in which the respondent made inappropriate remarks to her and subjected her to [page451] unwelcome and gratuitous physical contact of a sexual nature. It was her allegation that these episodes occurred after 5:00 p.m. when the normal workday was over. Sometimes, the respondent was drinking wine. According to various witnesses, this was a fairly common occurrence among lawyers in the office after 5:00 p.m. S.G. also gave evidence that she felt ashamed and embarrassed, and that she was powerless as an employee to avoid the abuse.

[12] The respondent testified that he did not remember S.G. and that he had not worked with her directly. He denied making any of the remarks attributed to him, or that he had ever touched her. His wife testified that he was normally home for dinner by 7:00 p.m. in this period of time.

[13] Steven Ellis, a lawyer in the firm, testified that the respondent worked long hours, sometimes staying after 6:00 and probably 7:00 p.m. He recalled S.G., but testified that she worked standard hours, leaving around 4:00 or 4:30 p.m. Mr. Ellis did not recall that she worked overtime except on very rare occasions.

[14] The allegations of L.D. related to incidents of inappropriate touching and comments in January 1998, which the respondent denied.

The Hearing Panel's Decision on the Merits

[15] The Hearing Panel heard from ten witnesses over the course of seven days in October and November 2002. Argument was heard on March 12, 2003. On November 18, 2003, the Hearing Panel released a 40-page decision in which it found that the allegations in respect of C.T. and S.G. were proved in accordance with the applicable standard of proof, but the allegation of L.D. was not.

[16] Following a penalty hearing on January 1, 2004, the Hearing Panel released a further decision on June 22, 2004 by which it ordered the respondent disbarred and fined $10,000.

[17] In its reasons, the Hearing Panel set out the standard of proof applicable in a disciplinary hearing of a self- governing profession -- namely, that there must be clear and convincing proof of professional misconduct, based on cogent evidence (reasons, paras. 14-16, 19). In assessing the credibility of witnesses, it adapted the test set out by the Supreme Court of Canada in R. v. W. (D.), [1991] 1 S.C.R. 742, [1991] S.C.J. No. 26, 63 C.C.C. (3d) 397, stating that it was governed by the following parameters (at para. 21):

(a) If the Panel believes the evidence of the Member, assuming it is exculpatory, it must dismiss that particular; [page452]

(b) if the Panel does not believe the testimony of the Member, assuming it to be exculpatory, the Panel must consider all of the evidence tendered. Before it may find a Member guilty of the particular alleged, the Panel must ask itself whether, on the basis of the evidence it does accept, it is convinced that there is clear and convincing proof based upon that evidence of the guilt of the Member.

[18] With respect to each particular, the Hearing Panel reviewed the evidence of each witness in detail and then made its findings. For example, it described the evidence of C.T. about a sexual relationship with the respondent between August and December 1990. She testified that there were unwanted sexual comments and touching that occurred before and after that relationship. Testimony was also given by two other solicitors with whom she dealt subsequently, Ron Brady and Brian Brock, as well as a lawyer, Darla Wilson, who had practised with the respondent. The defence witnesses were the respondent, who denied all of the allegations of sexual harassment, his wife and his secretary.

[19] According to the Hearing Panel, the assessment of the credibility of C.T. and the respondent was of significant importance in determining whether the allegations had been proved. The Hearing Panel concluded that it "preferred" the evidence of C.T. to that of the respondent on all material matters (at paras. 93-94), stating (at para. 94):

Taking all the evidence into consideration, the Panel prefers the evidence of C.T. with respect to material matters. She withstood cross-examination well. There was also independent evidence, as noted, which corroborated her version of relevant events. While there was contradictory evidence on the lay-out of the member's office and related matters, the Panel concludes that this evidence, in itself, was not material to a finding of whether sexual harassment took place. Otherwise, where C.T.'s testimony differs from that of the Member, taking all of the evidence into account, and the tendering of it, the Panel prefers hers.

[20] The Hearing Panel then went on to conclude that there was clear and convincing proof based upon the evidence that the respondent sexually harassed C.T. in a professional context in seven circumstances, which were set out in the reasons. Then, after referring once more to the standard of proof in para. 98, the Hearing Panel stated (at para. 99):

Accordingly, the Panel finds that in the period from 1988 to 1993, inclusive, the member sexually harassed in a professional context C.T. by engaging in a series of incidents involving unwelcome sexual advances and verbal or physical conduct of a sexual and non-sexual nature including but not limited to engaging in unwanted touching, making sexually suggestive comments [page453] and engaging in unwanted contact or attention after the end of a consensual personal relationship.

[21] With respect to the second particular involving S.G., the Hearing Panel again reviewed the testimony in detail (at paras. 100-31). Evidence was heard from S.G., as well as lawyer Darla Wilson, the respondent, his secretary, and Mr. Ellis, another lawyer then with the respondent's firm.

[22] Again, the Hearing Panel stated that to determine what had transpired, it must assess the credibility of S.G. and the respondent. At para. 135, it stated that it preferred the evidence of S.G. to that of the respondent, and that it did not believe the respondent's blanket denials. The Hearing Panel then made a number of findings that the respondent had made inappropriate comments or acted inappropriately towards S.G. and stated that it "finds that the evidence of S.G. constitutes clear and convincing proof of a cogent nature given the gravity of the allegation and the seriousness of the consequences" (at para. 146). It concluded that the respondent had sexually harassed S.G. from September 1990 to May 1991 and from January 1992 to March 1993 (at para. 148).

[23] With respect to the allegation involving L.D., the Hearing Panel again summarized the testimony (at paras. 149-202). Because of significant memory lapses and inconsistencies between L.D.'s testimony and her prior statements and testimony, the Hearing Panel concluded that the Law Society had not discharged its burden of proof with respect to the allegation involving L.D.

The Hearing Panel's Penalty Decision

[24] Following a penalty hearing on January 13, 2004, the Hearing Panel issued a 32-page decision on June 22, 2004 ordering the disbarment of the respondent and a fine of $10,000.

[25] In its reasons, the Hearing Panel reviewed the sanctions imposed in other decisions against members of the Law Society who had committed sexual harassment, observing that the primary sanction imposed in the past was a suspension (at para. 45). However, it concluded that it was not bound by decisions of a former Discipline Convocation or Hearing Panel (at para. 47).

[26] The Hearing Panel then went on to find that sexual harassment constitutes a breach of trust and constitutes professional misconduct (at para. 50). It concluded that there had been an abuse of trust and an abuse of power by the respondent in his treatment of both S.G. and C.T. (at paras. 57-59), and that there were significant negative impacts on both women (at para. 62). It found that there would not appear to be a risk of the respondent [page454] re-offending, and there did not appear to be a concern for future protection of the public (at para. 73). However, the Hearing Panel noted that the respondent had not acknowledged, in a meaningful manner, the inappropriateness of his conduct (at para. 84).

[27] Key to the ultimate decision that the respondent should be disbarred are the following statements (at paras. 85-86):

A violation of trust within the solicitor/client relationship or the solicitor/employee relationship strikes at the core values of the profession. Breach of trust involving a client's money, save in exceptional circumstances, invariably results in disbarment. We ask: how can it be in this day and age, given the public interest and expectation that a lawyer will be disbarred for stealing a client's money, save in exceptional circumstances, that the solicitor will not face the same fate when he/she commits sexual harassment, a breach of trust which violates the dignity and self-respect of a client or employee?

This Panel concludes that this contradiction must be confronted and must no longer be condoned. In our considered view, sexual harassment representing a breach of trust must be seen as equivalent to a breach of trust with respect to a client's money. The penalties for these types of transgressions must be equal. The same view in our opinion, applies to sexual harassment in the context of the solicitor/ employee relationship.

[28] The Hearing Panel had earlier observed that other cases had decided that a lawyer who wilfully misappropriates funds would be disbarred, absent exceptional mitigating circumstances (at para. 80). The Panel then asked whether there were exceptional factors that would result in a sanction other than disbarment in this case. It considered the respondent's age, lack of prior disciplinary history, efforts at rehabilitation and the likely lack of any prospect of future re-offending and concluded that there were "insufficient mitigating factors" to move it from concluding that disbarment was the appropriate sanction (at para. 93).

The Appeal Panel's Decision

[29] A five-member Appeal Panel heard argument on December 1 and 2, 2004, and issued a decision on February 10, 2005 setting aside the findings of professional misconduct and the penalty of disbarment and ordered a new hearing into the allegations of professional misconduct. It concluded that the Hearing Panel had misdirected itself on R. v. W. (D.), failed to assess credibility properly, erred by giving inadequate reasons, and assessed a penalty that was unreasonable.

[30] The Appeal Panel determined that the appropriate standard of review was correctness with respect to the issues of whether the Hearing Panel properly instructed itself as to the way in which credibility should be assessed and whether it provided adequate reasons for its decision. On penalty, the Appeal [page455] Panel held that the appropriate standard was reasonableness simpliciter (reasons, paras. 21-23).

[31] At the hearing before the Appeal Panel, counsel for the respondent conceded that if the facts alleged by the complainants were properly proven, the acts would constitute sexual harassment and a breach of Rule 27 of the Rules of Professional Conduct.

[32] With respect to the assessment of credibility, the Appeal Panel held that the Hearing Panel had inappropriately engaged in a credibility contest between the respondent and the complainants (at paras. 35 and 40). The Appeal Panel concluded that the Hearing Panel had misinstructed itself as to the application of the W. (D.) decision, as adopted in Re Evans, [2004] Lawnet 4 (Ont. Judicial Council), and therefore, its decision must be set aside.

[33] The Appeal Panel then articulated "the proper three step W. (D.) analysis" to be applied in a disciplinary hearing (at para. 47):

(a) if the Panel believes the evidence of the member, assuming it is exculpatory, the particular must be dismissed;

(b) if the Panel disbelieves the testimony of the member, but the member's evidence leads the panel to conclude that they cannot find clear and convincing proof of the particular, based on cogent evidence, the particular must be dismissed. In so doing, the member's evidence must be considered in the context of the evidence as a whole;

(c) even if the Panel disbelieves the member's evidence in its entirety, the panel must ask themselves, on the basis of the evidence they do accept, and disregarding the member's evidence, whether the facts substantiating the particular were made out by clear and convincing proof, based on cogent evidence? If not, the particular must also be dismissed.

[Emphasis added]

[34] The Appeal Panel went on to say that if it was incorrect with respect to its W. (D.) approach, the Hearing Panel erred in its consideration of "all the evidence tendered" (at para. 49). In particular, the Hearing Panel had failed to appropriately address the confirmatory and contradictory evidence before it, as well as the evidence of C.T.'s possible improper motive arising from dissatisfaction with a personal injury settlement.

[35] The Appeal Panel also held that the Hearing Panel failed to give adequate reasons, because it did not explain why it disbelieved the respondent in light of the inconsistencies in the evidence (at para. 100). At para. 108, the Appeal Panel stated, "Having reviewed all of the evidence before us, this Panel does not find the member's evidence inherently incredible." Therefore, it held that the Hearing Panel was obligated to explain its [page456] rejection of the respondent's credibility. As well, it held that the failure of the Hearing Panel to provide reasons for its conclusion limited the respondent's appeal to procedural errors by the Hearing Panel, because there was no ability to determine whether there were any other grounds for appeal.

[36] The Appeal Panel went on to state that in the event it was incorrect in finding errors of law, it would have substituted a penalty of 12 months' suspension for the penalty of disbarment. While the Appeal Panel accepted the proposition that sexual harassment of a client or an employee is a breach of trust, it rejected the analogy that sexual harassment is equivalent to a breach of trust arising from the misappropriation of a client's money. In addition, it found the decision unreasonable, because the Hearing Panel appeared to take the respondent's failure to acknowledge his inappropriate conduct into account in determining the penalty. Finally, the Appeal Panel held that it was unreasonable for the Hearing Panel to conclude that general deterrence could only be accomplished by disbarment (at para. 142).

Issues on this Appeal

[37] The Law Society appeals to this court pursuant to s. 49.38 of the Law Society Act. The appeal raises a number of issues:

(1) What is the appropriate standard of review governing the Appeal Panel's review of the Hearing Panel's decision?

(2) What is the appropriate standard of review of the Appeal Panel's decision?

(3) Did the Hearing Panel err in its assessment of the credibility of witnesses?

(4) Did the reasons for decision of the Hearing Panel meet the legal requirements for decisions of administrative tribunals?

(5) Did the Appeal Panel err in concluding that the Hearing Panel's penalty was unreasonable?

Issue No. 1: What is the appropriate standard of review governing the Appeal Panel's review of the Hearing Panel's decision?

[38] The Hearing Panel had three tasks before it in dealing with the allegations against the respondent. It had to make findings of fact, including assessments of credibility. It had to select the appropriate standard of proof, and, finally, it had to apply the [page457] standard of proof to the facts as found to determine whether the alleged impropriety had been proven.

[39] The standard of review of a decision of an administrative tribunal is determined by the pragmatic and functional approach set out in Dr. Q. v. College of Physicians and Surgeons of British Columbia, 2003 SCC 19, [2003] 1 S.C.R. 226, [2003] S.C.J. No. 18 (at paras. 21 and 26).

[40] In reviewing the decision of a Hearing Panel on findings of fact and conclusions about credibility, an Appeal Panel is required to show deference, and it should only interfere if the findings of the Hearing Panel are unreasonable (Law Society of Upper Canada v. Crozier, [2005] O.J. No. 4520, 203 O.A.C. 176 (Div. Ct.), at para. 34; Toronto (City) Police Service v. Blowes-Aybar, [2004] O.J. No. 1655, 185 O.A.C. 352 (Div. Ct.), at para. 33). With respect to the Hearing Panel's assessment of credibility and the application of the standard of proof to the evidence, the Appeal Panel should have asked itself whether the decision of the Hearing Panel was unreasonable -- that is, it must consider whether the reasons of the decision-maker, taken as a whole and subjected to a somewhat probing examination, support the decision reached (Law Society of New Brunswick v. Ryan, 2003 SCC 20, [2003] 1 S.C.R. 247, [2003] S.C.J. No. 17, at para. 55).

[41] However, in this case, the Appeal Panel held that the Hearing Panel made errors of law in its assessment of credibility and in failing to give adequate reasons. As a result, it reviewed the decision of the Hearing Panel on a standard of correctness with respect to these issues. That is the proper standard for review on a question of law that is not within the specialized expertise of a tribunal.

[42] With respect to the issue of penalty, the Appeal Panel applied a standard of reasonableness to the Hearing Panel's decision. This is consistent with the holding of the Supreme Court of Canada in Ryan and this court in Law Society of Upper Canada v. Crozier, supra.

Issue No. 2: What is the appropriate standard of review of the Appeal Panel's decision?

[43] The Divisional Court must determine whether the Appeal Panel chose and applied the correct standard of review. The question of the right standard to select and apply is one of law, and the Appeal Panel must answer this question correctly. If the Appeal Panel errs with respect to the correct standard of review of the decision of the Hearing Panel, the court's function is to assess the Hearing Panel's decision in light of the correct standard of review (Blowes-Aybar, supra, at paras. 24-29). [page458]

[44] The Appeal Panel's decision on the merits turns on questions of law that are not within its specialized expertise. Therefore, the standard of review to be applied by this court in review of the Appeal Panel's determination of questions of law is also correctness.

[45] On this appeal, the standard of reasonableness applies to the Appeal Panel's decision on penalty (Ontario (Provincial Police) v. Favretto (2004), 72 O.R. (3d) 681, [2004] O.J. No. 4248 (C.A.), at para. 50).

Issue No. 3: Did the Hearing Panel err in its assessment of the credibility of witnesses?

The W. (D.) issue

[46] In the view of the Appeal Panel, the Hearing Panel had erred in assessing the credibility of the witnesses, because it had engaged in a credibility contest between the complainants and the respondent (para. 40). This was said to be demonstrated by the Hearing Panel's statement that it "preferred" the evidence of C.T. and S.G. to that of the respondent. In approaching credibility in this way, the Hearing Panel was said to have erred, because it adopted a two-step approach and did not consider the third alternative from W. (D.), supra -- namely, whether the respondent's evidence, although not believed, would prevent the trier, in the context of the evidence as a whole, from finding clear and convincing proof. The Appeal Panel then concluded, "This Panel finds that the Hearing Panel, in considering credibility, misinstructed itself as to the applications of W. (D.) as has since been adopted in Re Evans, supra", and its decision must be set aside (at para. 44).

[47] In Re Evans, supra, a panel of the Ontario Judicial Council stated that in assessing credibility, it was "largely informed by the usual instructions given by a trial judge to a jury in a criminal trial, subject of course to the different standard of proof as discussed" (at para. 9). While there is no explicit mention of W. (D.) in Evans, it is evident that this is the authority referred to. However, it is impossible from the reasons in Evans to know in what way W. (D.) was applied in that case.

[48] W. (D.) is a case about the burden of proof in which the Supreme Court was concerned that a jury in a criminal case clearly understand that the Crown must prove the guilt of an accused beyond a reasonable doubt. In particular, where credibility is important, the trial judge must instruct the jury that reasonable doubt applies to that issue (para. 27). The court made it clear that in a criminal case, it is an error for a trial judge to tell [page459] the jury that they must believe either the defence or the Crown witnesses (at para. 26). To do so ignores a third possibility in a criminal case -- that the trier of fact does not accept the accused's evidence, but that evidence, considered in the context of the evidence of the whole, may leave the trier with a reasonable doubt.

[49] Therefore, Cory J., writing for the majority, set out a model three-part jury instruction in order to ensure that a jury will not convict an accused who testifies, simply because it does not believe him or her. The second part of the model charge was formulated so that a jury would understand that in cases involving assessments of credibility of a complainant and an accused where the accused testifies, his evidence, considered in the context of the evidence as a whole, may leave the jury with a reasonable doubt (at para. 28).

[50] Counsel for the respondent submitted that a modified W. (D.) test applies in the assessment of credibility in a disciplinary proceeding, given Evans. Moreover, by "preferring" the complainants' evidence, the Hearing Panel improperly treated the matter as a credibility contest between the complainants and the respondent.

[51] The Law Society submitted that it is not a requirement that W. (D.) be applied in a disciplinary proceeding when assessing credibility, and that the Hearing Panel applied the appropriate burden and standard of proof in determining whether the allegations against the respondent had been proved.

[52] In my view, the Appeal Panel erred in law in finding that a modified W. (D.) test controls the assessment of credibility of witnesses in the administrative law context. While it purported to follow Evans, that case is of no real assistance, as it is impossible to know from a reading of the reasons if and how W. (D.) was applied in that case. Nowhere in the lengthy reasons and numerous findings of credibility of the Judicial Council is there any indication that the members are working through the three steps outlined by the Appeal Panel in this case.

[53] Moreover, it is significant that the Supreme Court held that a failure to include the proposed W. (D.) instruction in a criminal jury charge was not fatal, if the correct burden and standard of proof were clear in the charge (at para. 29). Indeed, in that case, despite the trial judge's error in a recharge, the court concluded that the jury was not misled as to the burden and standard of proof. Moreover, in R. v. Minuskin (2003), 68 O.R. (3d) 577, [2003] O.J. No. 5253 (C.A.), the Court of Appeal noted that "trial judges in a judge alone trial do not need to slavishly adhere to this formula" (at para. 22). What is important in a [page460] criminal trial is that the trier of fact be aware that even if it does not believe the defence evidence, the evidence as a whole may leave the trier with a reasonable doubt.

[54] The proceedings before the Hearing Panel were not criminal. The Hearing Panel was not bound to assess the guilt or innocence of the member based on the criminal standard of proof. Rather, the standard of proof before the Hearing Panel was the civil standard of a balance of probabilities. However, given the seriousness of the allegations of professional misconduct and the possible consequences for the respondent, the allegations had to be proven by clear, convincing and cogent evidence (Re Bernstein and College of Physicians and Surgeons of Ontario (1977), 15 O.R. (2d) 447, [1977] O.J. No. 2182 (Div. Ct.), at pp. 470-71 O.R.).

[55] The Hearing Panel quoted from a statement by Gavin Mackenzie in Lawyers and Ethics: Professional Responsibility and Discipline (Toronto: Thomson Carswell, 2006), that the standard of proof "rises" with the gravity of the allegation and the seriousness of the consequences (para. 14 of the Panel's reasons). In fact, the standard of proof does not change -- it remains the civil standard of proof on a balance of probabilities. However, given the serious nature of the allegations of professional misconduct, the quality of the evidence required to prove the allegations increases.

[56] As the Nova Scotia Court of Appeal stated in Dhawan v. College of Physicians and Surgeons of Nova Scotia, 1998 NSCA 83, [1998] N.S.J. No. 170, 168 N.S.R. (2d) 201 (C.A.), the gravity of the charges in the context of a professional discipline case requires clear and convincing evidence to tilt the balance of probabilities (at para. 26). In the passage from Mr. Mackenzie's commentary, it appears that this is in fact what he meant when he said the standard of proof rises, as he went on to say that the trier of fact must scrutinize the evidence with greater care when the allegations are serious.

[57] The significance of the requirement of clear, convincing and cogent evidence is well-explained in Linda R. Rothstein, Robert A. Centa and Eric Adams, "Balancing Probabilities: The Overlooked Complexity of the Civil Standard of Proof" (The Law Society of Upper Canada Special Lectures, 10 June 2003), Law Society of Upper Canada, ed., The Law of Evidence (Toronto: Irwin Law, 2004), p. 5 (Q.L.). While the civil standard of balance of probabilities applies in the professional discipline context, the authors say: [page461]

. . . probability depends on the circumstances, and where there are serious consequences at issue, a higher or more rigorous evidentiary standard must be met for that fact to be found probable. This more rigorous approach to the evidence involves a qualitative assessment of the evidence -- for "cogency" and "persuasiveness" -- in determining whether the fact in question has been demonstrated to be probable.

[58] While the reasoning in W. (D.) may be of assistance to a trier of fact faced with an assessment of credibility, the strict application of the test in W. (D.) is not required in the context of disciplinary hearings before administrative tribunals. A failure to follow the test is not fatal, provided the trier of fact applies the correct burden and standard of proof.

[59] Many cases were cited in this appeal where courts have reviewed the decisions of professional discipline tribunals. In none has there been any reference to the need to apply W. (D.) in assessing credibility. Moreover, the Nova Scotia Court of Appeal expressly rejected the proposition that a labour arbitrator was required to apply W. (D.) in determining credibility in a discipline case (Nova Scotia Teachers Union v. Nova Scotia Community College, 2006 NSCA 22, [2006] N.S.J. No. 64, 265 D.L.R. (4th) 288 (C.A.), at paras. 25 and 36).

[60] In this case, the Hearing Panel correctly identified the standard of clear, convincing and cogent evidence. The panel members were very aware that credibility was of key importance in determining whether the allegations had been proved. Applying the appropriate standard, they held that two of the allegations of professional misconduct had been proved, and one allegation had not been proved.

[61] The Appeal Panel took issue with the use of the word "preferred" by the Hearing Panel, saying that this showed the Hearing Panel treated the determination of credibility as a contest between the complainants and the respondent. However, the use of that word does not alone warrant appellate intervention. As the Nova Scotia Court of Appeal stated in Dhawan, supra, the important question is whether the tribunal has understood the burden and standard of proof. In that case, the tribunal had before it two contradictory versions of events, and the court observed that it would have been impossible to "prefer" one version without rejecting the other [at para. 44]:

What is most significant however is the fact that when the committee stated its preference, it was not choosing between relatively comparable or similar alternatives. The evidence of the appellant on the one hand was sharply contradictory to that of each complainant on the other. It would have been impossible to "prefer" one account without completely rejecting the other. Any kind of coexistence between the two versions or anything close to it was not an option. The preference of one version or [page462] the other in this context clearly implied the rejection of the other -- not a lesser choice.

[62] Similarly, in this case, the complainants and the respondent each gave very different versions of events. As is often the case, occurrences of sexual misconduct most often arise in private or in other circumstances where there are no independent witnesses. S.G. and C.T. described various encounters with the respondent, while he made a blanket denial of any wrongdoing. At the heart of the case lay an assessment of the credibility of the complainants and the respondent. As in Dhawan, it would have been impossible for the Hearing Panel to accept the evidence of the complainants without completely rejecting the evidence of the respondent.

[63] The Hearing Panel did not believe the respondent's version of events. It accepted the versions of S.G. and C.T., and it gave reasons for doing so. With respect to C.T., the Panel stated that she testified in a forthright manner, that she withstood cross-examination well, and that there was independent evidence "corroborating" her version of events. The contradictory evidence on the layout of the respondent's office and related matters was, in the view of the Hearing Panel, not material to a finding of whether sexual harassment occurred. The Panel then went on to ask itself whether the evidence of C.T. met the clear, convincing and cogent proof requirement and concluded that it did.

[64] With respect to S.G., the Panel held that she testified in a forthright and honest manner and was not disturbed in any material respect on cross-examination. The Panel believed S.G., and it did not believe the respondent's blanket denials. The Panel also held that S.G.'s evidence constituted clear, convincing and cogent proof.

[65] In contrast, the Hearing Panel found that the third complainant was not a credible witness because of significant memory lapses and an inability to explain prior inconsistencies in her various statements and testimony. Therefore, it dismissed her allegations.

[66] In my view, the Hearing Panel understood the burden and standard of proof. It assessed the credibility of each complainant and the respondent, and accepted the evidence of two of the complainants and rejected the evidence of the respondent. It was not required to apply W. (D.) in its deliberations. Therefore, the Appeal Panel was incorrect in holding that the Hearing Panel erred in law in failing to apply its modified W. (D.) test.

[67] Indeed, the application of the second step of that test would not have changed the decision of the Hearing Panel. They [page463] did not believe the respondent. On the evidence that they accepted, they found that there was clear, convincing and cogent proof of misconduct.

The Hearing Panel's assessment of the evidence

[68] The Appeal Panel concluded that even if [it] was wrong with respect to the modified W. (D.) approach, the Hearing Panel erred in its consideration of the evidence. Specifically, the Appeal Panel found that the Hearing Panel failed to appropriately address both confirmatory and contradictory evidence.

[69] When considering the Hearing Panel's assessment of the evidence and its findings of fact, the appropriate standard of review for the Appeal Panel was reasonableness. Its task was to determine whether the Hearing Panel's conclusions were reasonable, based on the evidence before it. However, the Appeal Panel applied a standard of correctness. In doing so, it erred in law.

[70] Moreover, the Appeal Panel erred by embarking on its own assessment of the evidence and substituting its views on the quality of the evidence and the credibility of the witnesses. In doing so, it revisited selective parts of the evidence in great detail, but did not consider the reasons of the Hearing Panel as a whole. Had it done so, there was no basis to interfere, as the Hearing Panel's decision was a reasonable one on the evidence before it.

[71] This case turned on an assessment of the credibility of various witnesses and, in particular, the complainants and the respondent. As the Supreme Court of Canada stated in Dr. Q., supra, at para. 38:

Assessments of credibility are quintessentially questions of fact. The relative advantage enjoyed by the Committee, who heard the viva voce evidence, must be respected.

[72] The Appeal Panel took issue with the Hearing Panel's comment that certain independent evidence "corroborated" C.T.'s version of events. Early in its reasons, the Hearing Panel stated that to be corroborative, evidence must directly support allegations of fact (paras. 11 and 13). The independent evidence is not described, but it appears to be a hotel bill including phone calls to the respondent's office, a note on hotel stationery with the respondent's phone number, and a note from him referring C.T. to a storeowner in the Yorkville area. The Appeal Panel is correct that such evidence is not "corroborative" of the acts of sexual harassment alleged.

[73] However, it appears that the Hearing Panel is actually treating this evidence as confirmatory of C.T.'s evidence of the [page464] events on August 20, 1990. In order to be confirmatory, evidence must strengthen the trier of fact's belief that the witness is telling the truth (R. v. Krugel, [2000] O.J. No. 354, 143 C.C.C. (3d) 367 (C.A.), at para. 98). In this case, this evidence, while not particularly strong, can be taken as supporting C.T.'s recollections of what occurred on the day in question.

[74] The Appeal Panel held that the Hearing Panel should also have considered whether C.T. had an improper motive for her complaint, as there was evidence that she had wanted to sue the respondent because of dissatisfaction with a settlement reached in a personal injury law suit, and there was delay in bringing her complaint. As well, the Appeal Panel was of the view that the appointments in the respondent's datebook suggested a lack of opportunity to attend C.T.'s hotel room on August 20, 1990. Moreover, C.T. testified that the respondent left that day to help get a client's husband out of jail, when it was his evidence that he had not practised criminal law for 25 years.

[75] The Appeal Panel also noted a number of inconsistencies between C.T.'s evidence and that of other witnesses -- for example, about whether there was a couch in the respondent's office, whether his office door was always open, and whether there were family photos in the office, including one with his wife.

[76] With respect to S.G., the Appeal Panel held that the Hearing Panel should have analyzed the inconsistencies in the evidence as to the hours she worked.

[77] There is no question that the reasons of the Hearing Panel could have been more detailed, and they could have better explained the conclusions reached. However, the Hearing Panel summarized all the evidence of all the witnesses pertaining to each allegation before coming to a conclusion with respect to each allegation. In the case of the allegations respecting C.T. and S.G., the Hearing Panel concluded that were there any inconsistencies, such as the existence of the couch or S.G.'s hours, they were not material inconsistencies.

[78] The Appeal Panel appears to have retried the case, but in doing so was selective in the evidence it considered. For example, they noted that there was conflict between C.T.'s evidence about the couch and the evidence of the respondent, his wife and secretary. However, the Appeal Panel does not mention that two other witnesses, S.G. and lawyer Darla Wilson, gave evidence that there was a couch or two chairs that could be pushed together like a couch in the respondent's office.

[79] Similarly, while the Appeal Panel states that there might be reason to question C.T.'s motive, they make no mention of the [page465] evidence of lawyer Brian Brock and C.T. that the delay in reporting the complaint arose from her concerns over her brother's claim that was being handled by the respondent. Nor do they refer to the evidence that no financial demand was made by any of the complainants.

[80] The Appeal Panel also seems to have weighed the evidence itself -- for example, by stating that the appointments in the respondent's appointment book on August 20, 1990 suggest that he could not have been with C.T. However, the calendar shows on August 20, 1990 that the respondent was free at the end of the day and could have been with her.

[81] The Appeal Panel also held that C.T.'s evidence should be viewed with caution because she testified that the respondent left to bail someone out of jail, and he had not practised criminal law for 25 years. However, the evidence was not given to prove that the respondent was practising criminal law, and the Hearing Panel did not find it material in assessing C.T.'s credibility.

[82] The Appeal Panel was also concerned that the Hearing Panel did not consider whether the early advances were consensual. However, the respondent denied any sexual relationship, and C.T. never admitted that it was purely consensual. Therefore, the Hearing Panel made no error in failing to refer to the consensual nature of the relationship.

[83] With respect to the hours of S.G., the Hearing Panel held that any inconsistencies were not material, and it was not unreasonable for it to do so. There was evidence which the Hearing Panel could believe that S.G. did work later than 4:00 or 4:30 p.m., as described by lawyer Steven Ellis, given her evidence about the consumption of wine in the office after 5:00 p.m. Similarly, there was evidence contradicting the respondent's wife's testimony that he was regularly home by 7:00 p.m.

[84] The Divisional Court in Trotter v. College of Nurses of Ontario, [1991] O.J. No. 348, 44 O.A.C. 302 (Gen. Div.) noted that it is not fatal to a decision that certain evidence is not mentioned or specific reasons given for its rejection (at p. 3 (QL)). In this case, there is no indication that the Hearing Panel misapprehended the evidence of any witness or failed to consider material parts of the evidence. It had the advantage of seeing all the witnesses and hearing all the evidence over the course of a number of days. Its decision was reasonable and withstands analysis on the reasonableness standard of review. Therefore, the Appeal Panel erred in overturning the decision based on the way in which the evidence was analyzed. [page466]

Issue No. 4: Did the reasons for decision of the Hearing Panel meet the legal requirements for decisions of administrative tribunals?

[85] The Appeal Panel, adopting statements in R. v. Sheppard, 2002 SCC 26, [2002] 1 S.C.R. 869, [2002] S.C.J. No. 30, held that the Hearing Panel failed to give adequate reasons for its decision, as it did not discuss the contradictions in the evidence with respect to material issues. Nor did the Hearing Panel explain why it disbelieved the respondent in light of those inconsistencies. The Appeal Panel went on to state that having reviewed all the evidence, "this Panel does not find the member's evidence inherently incredible" (at para. 108).

[86] There are two lines of authority in the criminal case law in which a decision at trial is challenged on the basis of an error of law because of the reasons given. In Sheppard, the trial judge in effect gave no reasons, while in R. v. G. (L.), 2006 SCC 17, [2006] 1 S.C.R. 621, [2006] S.C.J. No. 17, 266 D.L.R. (4th) 1, the issue was the adequacy of the reasons.

[87] In Sheppard, the Supreme Court of Canada made it clear that its decision was addressed to the criminal justice context and not administrative tribunals (at para. 19). The court went on to adopt a functional approach, stating that there should be no intervention on appeal unless the deficiencies in the reasons prevent meaningful appellate review (at paras. 25 and 28). In that case, the court described the trial decision as "unintelligible" (at para. 56). It intervened because there were significant inconsistencies and conflicts in the evidence not addressed in the reasons, and that evidence related to a key issue on the appeal. Moreover, the record before the court did not otherwise explain the decision in a satisfactory manner.

[88] In G. (L.), the Supreme Court dealt with an attack on the adequacy of reasons, holding (at para. 13) that there are two stages of inquiry: first, are the reasons inadequate; and second, if so, do they prevent appellate review? The court went on to say (at para. 20):

Assessing credibility is not a science. It is very difficult for a trial judge to articulate with precision the complex intermingling of impressions that emerge after watching and listening to witnesses and attempting to reconcile the various versions of events. That is why this Court decided, most recently in H.L., that in the absence of a palpable and overriding error by the trial judge, his or her perceptions should be respected.

[89] In Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817, [1999] S.C.J. No. 39, the Supreme Court discussed the requirement for reasons in an administrative law [page467] context. The court held that the failure to provide some form of reasons will constitute a denial of procedural fairness in certain circumstances -- for example, where the decision has significant importance for an individual or there is a statutory right of appeal (at para. 43). In that case, the court held that the notes of a subordinate reviewing officer could be taken, by inference, to be the reasons for the decision made by a senior officer (at para. 44).

[90] The Divisional Court in Kalin v. Ontario College of Teachers (2005), 75 O.R. (3d) 523, [2005] O.J. No. 2097 (Div. Ct.) found a breach of natural justice because a tribunal made seven key decisions without giving any reasons for those decisions. The result was held to thwart any meaningful right of appeal (at para. 58).

[91] In this case, there is no question that the Hearing Panel could have provided more detailed and better reasons. In particular, it could have examined the evidence in more depth. However, as the Supreme Court said in Sheppard at para. 26:

The appellate court is not given the power to intervene simply because it thinks the trial court did a poor job of expressing itself.

The issue is whether the reasons provided adequately demonstrate the rationale for the Hearing Panel's conclusions on credibility and the standard of proof so as to permit meaningful appellate review of the decision.

[92] In this case, the reasons meet the adequacy standard, and they are sufficient to permit meaningful appellate review. The Hearing Panel expressly turned its mind to the evidence and made clear findings with respect to credibility. It concluded that any inconsistencies were not material, as it reasonably could do when all the evidence was considered. Most importantly, it applied the correct standard of proof. While it did not say why it disbelieved the respondent, that alone is not grounds to overturn its decision. As this court has stated in Devgan v. College of Physicians and Sugeons of Ontario, [2005] O.J. No. 306, 193 O.A.C. 357 (Div. Ct.), a failure to give reasons for rejecting the credibility of a witness is not necessarily reversible error (at para. 53).

[93] The Appeal Panel erred in law in holding that the Hearing Panel's reasons were insufficient. There was no denial of procedural fairness here because of the quality of the reasons of the Hearing Panel.

Issue No. 5: Did the Appeal Panel err in concluding that the Hearing Panel's penalty was unreasonable?

[94] Given the errors of the Appeal Panel, the appeal to this court must be allowed, and its order setting aside the finding of professional misconduct must be set aside. [page468]

[95] In the event that it erred in setting aside the Hearing Panel's decision, the Appeal Panel went on to consider the penalty decision. It concluded that the penalty was unreasonable, and that a suspension of 12 months would be the appropriate penalty.

[96] The Law Society submitted on this appeal that the penalty imposed by the Hearing Panel was reasonable. However, counsel stated that if this court upheld the Appeal Panel's conclusion that the penalty was unreasonable, the Law Society would be content with the penalty proposed by the Appeal Panel.

[97] Counsel for the respondent took the position that the Hearing Panel's penalty decision was unreasonable, but he also took issue with the suspension proposed by the Appeal Panel. Before the Hearing Panel, he had submitted that the appropriate penalty was a three to six-month suspension. In oral argument before this court, he explained his dilemma in challenging the proposed 12-month suspension: as there was no mention of the penalty of suspension in the formal order of the Appeal Panel, he was unable to launch a cross-appeal on penalty.

[98] In my view, the Appeal Panel reasonably concluded that the Hearing Panel's penalty decision was unreasonable, and that the order of disbarment should be set aside. However, it is not appropriate to substitute the penalty of suspension without giving the respondent an opportunity to challenge its reasonableness.

[99] The Appeal Panel concluded that the penalty of disbarment was unreasonable because the Hearing Panel's decision was based on three flawed premises. First, the Hearing Panel equated a breach of trust associated with the sexual harassment of a client to a breach of trust respecting the misappropriation of trust funds, which, absent extraordinary circumstances, results in disbarment. Second, the Hearing Panel concluded that disbarment was the only penalty available to address general deterrence. Third, the Hearing Panel appears to draw an adverse inference from the respondent's failure to acknowledge the misconduct.

[100] The Appeal Panel's conclusion that the analogy between sexual harassment and misappropriation of funds was inappropriate is a reasonable one. In circumstances where a lawyer is found guilty of professional misconduct as a result of misappropriation of trust funds, the member is invariably guilty of criminal conduct. Here, and in many cases of sexual harassment, there is neither an underlying allegation of criminal conduct nor a conviction. Moreover, as the Appeal Panel noted, there is a vast range of conduct constituting sexual harassment -- from [page469] an inappropriate comment or invitation to a sexual assault. To treat any conduct constituting sexual harassment as grounds for disbarment ignores the fact that some of this conduct is much more serious than other conduct, and a disciplinary sanction should reflect the degree of misconduct.

[101] As the Appeal Panel stated at paras. 128 and 129:

The obligation of a lawyer as the custodian of a client's monies is well-established. There can be no question in any lawyer's mind that she or he will be subject to a strict penalty for a breach of this fundamental rule.

By contrast, Rule 27 reflects an appropriate, but still emerging sensitivity on the part of the Law Society toward the personal conduct of a member directed toward a client, colleague or staff. Conduct complained of under this Rule frequently arises in complex social situations. It is difficult, on occasion, to distinguish the gauche from the professionally impermissible. It is therefore impossible at this stage to lay down a rule that all violations presumptively call for disbarment.

[102] The Hearing Panel also appears to have treated the respondent's failure to acknowledge misconduct as an aggravating factor in determining penalty. It stated on three occasions that the member "has not acknowledged in a meaningful manner the inappropriateness of his conduct". Acknowledging misconduct or a guilty plea may be a mitigating factor in determining penalty. However, to treat the failure to acknowledge misconduct as an aggravating factor is an error in principle (College of Physicians and Surgeons of Ontario v. Gillen (1990), 1 O.R. (3d) 710, [1990] O.J. No. 2280 (Div. Ct.), at pp. 711-12 O.R.). In doing so, the Hearing Panel failed to consider the respondent's right to defend the allegations and to conduct his defence as he saw fit.

[103] The Appeal Panel reasonably concluded that the penalty of disbarment, in the circumstances, was demonstrably unfit, having regard to the range of penalties for professional misconduct of this kind and in light of the historical context of the misconduct. The penalties previously imposed for sexual harassment ranged from a reprimand to a suspension, as set out in a chart in the respondent's factum. The longest penalty imposed by the Law Society [of] Upper Canada for sexual harassment was an 18-month suspension. Although the Hearing Panel correctly stated that stare decisis does not apply to administrative tribunals, a comparison of similar cases is an essential component when considering the appropriate penalty (Re Stevens and Law Society of Upper Canada (1979), 55 O.R. (2d) 405, [1979] O.J. No. 4546 (Div. Ct.), at p. 411 O.R.).

[104] Moreover, as the Appeal Panel stated, it is inappropriate to impose a penalty without placing the conduct in its historical [page470] context. The conduct at issue occurred over a decade before the disciplinary proceedings, and at a time when community and professional attitudes regarding sexual harassment were different. A penalty should be proportionate to the degree of non-compliance with the standards of the profession at the time that the misconduct occurred.

[105] In addition to the concerns which have been outlined above, the Hearing Panel imposed a penalty that was excessive given a number of factors: the lack of prior discipline history; the steps taken by the respondent to rehabilitate himself and to make his office more "transparent"; and the fact that the respondent was unlikely to reoffend.

[106] The Appeal Panel's conclusion that the penalty could stand was a reasonable one, and this aspect of the Law Society's appeal is dismissed. I would not interfere with the Appeal Panel's conclusion that the penalty of disbarment should be set aside. However, it would be unfair to the respondent to substitute the penalty of a 12-month suspension without giving him an opportunity to challenge it on appeal in accordance with the process set out below.

Conclusion

[107] The appeal of the Law Society is allowed in part. The order of the Appeal Panel setting aside the Hearing Panel's finding of professional misconduct and ordering a new hearing is set aside. The Appeal Panel's order that the penalty of disbarment be set aside is upheld, but the matter is referred back to the Appeal Panel to amend its formal order to reflect its decision that a 12-month suspension should be substituted.

[108] Counsel for the respondent is given leave to file a cross-appeal of the penalty within 30 days of the making of the amended order. The parties may make submissions in writing on the cross-appeal to this panel of the Divisional Court, which will remain seized.

[109] If the parties cannot agree on costs, they may make written submissions after the disposition of the cross-appeal or the expiry of the 30-day period for the cross-appeal if no cross-appeal is launched.

[110] MATLOW J. (dissenting): -- With respect, I am unable to agree with the disposition of the majority. I would dismiss the appeal from the order of the Appeal Panel. Because that order provides that the Hearing Panel's finding of professional misconduct and their imposition of disbarment be set aside and [page471] that a new hearing be held, it is not appropriate for me to deal formally with that part of this appeal that addresses the issue of penalty. Although the Appeal Panel stated, in para. 162 of their reasons, that, in the event that they were "incorrect regarding the errors in law", they would substitute a penalty of suspension for 12 months in place of the order of disbarment, that disposition was not, understandably, included in their final order. However, had I been persuaded that this appeal with respect to its substantive issues should be allowed and that the initial finding of professional misconduct should be upheld, I would have supported the imposition by this court of such a suspension in the place of disbarment without the necessity of requiring that any further notices of cross-appeal be delivered.

[111] Although I conclude that the Appeal Panel's order is correct and should not be disturbed, I respectfully disagree with much of their analysis of the issues of law which it determined as reflected in its reasons.

[112] My principal disagreement relates to the analysis and conclusions of the Appeal Panel, particularly in para. 25 and following of their reasons, regarding the adaptation and application of the rules set out in W. (D.) by the Hearing Panel. I will endeavour to explain my disagreement by returning to basic principles and how, in my view, they have been misapplied throughout the various stages of this proceeding.

[113] I begin by addressing the applicable burden of proof in this case, which rested on the Law Society, namely, to prove the alleged offences at the hearing before the Hearing Panel on a balance of probabilities. That means, despite some confusion on this point, that the Law Society had the burden of proving that it was more likely than not that each of the alleged offences had been committed by Neinstein.

[114] Despite the articulated simplicity of this burden of proof, as Swinton J. has shown in paras. 39 to 42 of her reasons, there is authority that, in the context of a professional discipline case, the gravity of the charges require "clear and convincing evidence to tilt the balance of probabilities" and, as well, that, in this context, "probability" depends on the circumstances of a case and that "where there are serious consequences at issue, a higher or more rigorous evidentiary standard must be met for that fact to be found probable".

[115] It may be that this court is bound to accept these expressions of the applicable burden of proof but, in my respectful view, it is impossible, as a matter of logic, for one to understand how a required burden of proof can be "on a balance of [page472] probabilities" and, at the same time, even more stringent than that because of the serious consequences at issue. Nor can I understand how this same burden of proof can logically be raised, in certain types of cases, by requiring "clear and convincing evidence" to tilt it. Either the applicable burden of proof is on a balance of probabilities or on something higher. It cannot, in my view, be both.

[116] Having made these observations, I am relieved to be able to conclude that the conundrum that I have described need not be resolved for the purposes of this appeal. The result of this appeal should not be affected by this. Whatever the correct precise description of the burden of proof on a balance of probabilities should be, I am still satisfied that the order in appeal is correct.

[117] I now move on from my discussion of the burden of proof in this case and how it should have been applied by the Hearing Panel. This leads me to my discussion of the rules in W. (D.).

[118] Where credibility was in issue in a case such as this, it was for the Hearing Panel alone to assess the evidence as its members thought proper. The law recognizes that they were entitled to believe all, none or part of the evidence given by any witness and that they were entitled to make their findings of fact by applying their collective wisdom to the evidence as they thought appropriate. As part of that process, they were also required to apply the burden of proof that was applicable and then determine whether the totality of the evidence, both for and against the probability that Neinstein had committed the alleged offences, satisfied them that the burden of proof had been met.

[119] On the appeal from the Hearing Panel's decision, it was the role of the Appeal Panel to determine whether or not the Hearing Panel had carried out their role correctly or whether, as argued on the appeal, they had fallen into legal error.

[120] In applying its assessment of the evidence to the required burden of proof in order to determine whether or not the burden had been met, the Hearing Panel sought assistance from the application of what has been described in these proceedings as an adapted version of the rules derived from W. (D.), a judgment which has had a profound impact on how triers of fact in criminal cases should apply the criminal burden of proof beyond a reasonable doubt.

[121] It is apparent to me from the record in this case that the Hearing Panel should not have applied the rules in W. (D.), even as the rules were adapted by them, and that by doing so, they inevitably fell into error which required the Appeal Panel to make the order that they did. [page473]

[122] In W. (D.), the Supreme Court of Canada provided the legal community with an important tool to be used by triers of fact to ensure that they correctly apply the criminal burden of proof beyond a reasonable doubt where there is an issue of credibility with respect to an essential element of an offence alleged. This tool involved the use of three propositions of logic. The first was a reminder that if the triers actually believed a denial of guilt by the accused, they were required to find him not guilty. The third was a reminder that, even if they do not believe the denial of guilt by the accused, they still had the duty to consider whether, on the basis of the evidence which they accepted, they were satisfied beyond a reasonable doubt of the guilt of the accused before they could properly find him guilty.

[123] It is the second proposition of logic set out in W. (D.) which, even more than the other two, has become identified with the name of the case. It was a reminder that, even if the triers did not actually believe a denial of guilt by an accused person but were nevertheless left in reasonable doubt by it, they were also required to find him not guilty. From that proposition, triers of fact are now routinely instructed that if they find that an accused's denial of guilt might reasonably be true, they were required to find him not guilty.

[124] These propositions were intended to demonstrate, as a matter of logic, that there were different ways for the Crown to be shown to have failed to prove guilt beyond a reasonable doubt in criminal cases in circumstances where the Crown's failure might not otherwise be apparent.

[125] Although it may be correct to characterize the rules in W. (D.) as rules relating to credibility, it is my respectful view that the rules relate more to the application of the criminal burden of proof than to credibility and that they should more properly be seen to relate, at a minimum, to both.

[126] The Hearing Panel, as described in para. 7 of the reasons of Swinton J., decided to adapt and apply the three W. (D.) rules to this case and, in the process, they reduced the number of rules to two. The first rule was said to be applicable "If the Panel believes the evidence of the Member . . ." and the second rule was said to be applicable "If the Panel does not believe the testimony of the Member". Unlike in W. (D.), there was no second rule included that contemplated the possibility that the Hearing Panel might not actually believe or disbelieve the evidence of the Member and might conclude, on some standard, that it might be true. If, for example, the Hearing Panel had concluded that they did not actually believe or disbelieve the evidence of the Member [page474] but, instead, concluded that the Member's denial of guilt was more likely true than not, Neinstein would have been entitled to be found not guilty. However, because of how the Hearing Panel adapted and applied W. (D.), this potential basis for finding Neinstein not guilty was not even considered. The Appeal Tribunal recognized this fatal flaw in the following observation in para. 41 of its reasons:

The two-step approach adapted by the Hearing Panel promotes the "either/or" approach: If the member is believed, the particular is dismissed. If he is disbelieved and the complainant's evidence meets the standard of proof, there will be a finding of misconduct. The trier is not directed to examine any other possibility.

[127] As well, the second adapted rule applied by the Hearing Panel provided that, before the Panel could find the Member guilty, they had to "ask itself whether, on the basis of the evidence it does accept, it is convinced that there is clear and convincing proof based upon that evidence of the guilt of the Member". This instruction called for the application of a burden quite different from that of proof on a balance of probabilities. As a result of applying this rule, the Hearing Panel failed to apply the required burden of proof on a balance of probabilities, even if the burden were to include "clear and convincing proof", and instead applied a requirement only resembling the correct burden of proof that the law required.

[128] Accordingly, it is my view that the Hearing Panel's adaptation and application of the W. (D.) rules led the Hearing Panel into legal error which was fatal to their ultimate disposition of this case.

[129] It will be evident from this analysis that if there is some benefit to be derived from adapting and applying those rules to cases such as this, an option about which I remain very sceptical, great care must be taken to adapt and apply the rules in a manner that does not lead to legal error. Whether or not that can be achieved successfully remains to be seen. However, neither the adaptation made by the Hearing Panel nor the three-step adaptation proposed by the Appeal Panel in para. 46 and following of their reasons meets this test. In my view, neither of these adaptations of the W. (D.) rules should ever be used.

[130] Subject to what flows from what I have stated above, I am satisfied that the Appeal Panel's conclusions regarding how the Hearing Panel made their findings regarding the credibility of witnesses, the treatment of certain evidence by the Hearing Tribunal given by the complainant, C.T., the treatment of certain evidence by the Hearing Panel as confirmatory and the adequacy [page475] of the reasons given by the Hearing Panel were correct. Each revealed significant errors of law that were made by the Hearing Panel and those conclusions alone, in my view, are sufficient to support the order in appeal.

Appeal allowed in part.