CITATION: Talarico v. The Law Society of Upper Canada 2012 ONSC 2493
COURT FILE NO.: 166/12
DATE: 20120425
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
Rosario Talarico
Graeme Hamilton, for the Applicant
Applicant
- and -
The Law Society of Upper Canada, Professional Regulation Division and the Hearing Panel of the Law Society of Upper Canada
Sean Dewart, for the Respondents
Respondents
HEARD: April 24, 2012 at Toronto
PERELL J.
REASONS FOR DECISION
[1] In September 2011, after a six-year investigation, the Law Society of Upper Canada began a discipline proceeding against Rosario Talarico. The Law Society alleged that he was guilty of professional misconduct with respect to a client’s fraudulent mortgage transactions. It alleged that Mr. Talarico participated in or knowingly assisted mortgage fraud. Mr. Talarico, who has an unblemished discipline record, denies the allegation, and he desires to defend the discipline charges.
[2] In February, 2012, with the hearing scheduled to begin on April 30, 2012, Mr. Talarico moved for an order compelling the Law Society to disclose information and documents, including client files, obtained while investigating another lawyer about the fraudulent mortgages.
[3] The Law Society Hearing Panel dismissed the motion with reasons to follow, yet to be delivered. Mr. Talarico then brought an application to the Divisional Court for judicial review, and on April 2, 2012, he sought an adjournment of the discipline hearing. The adjournment request was refused, and by the motion now before the Court, Mr. Talarico seeks a stay of the discipline hearing.
[4] The parties agree that the applicable test for a stay was set out by the Supreme Court of Canada in RJR - MacDonald Inc. v. Canada (Attorney General), [1994] 1 SCR 311. See also Ontario New Home Warranty Program v. Ontario (Commercial Registration Appeal Tribunal), [1997] O.J. No. 3454 (Div. Ct.).
[5] There are three elements to the test for granting a stay, and thus for Mr. Talarico to succeed on this stay motion, he must establish: (1) that there is a serious issue to be tried; (2) that he will suffer irreparable harm if the stay is not granted; and (3) in the choice of either granting or refusing the stay, the balance of convenience favours granting the stay.
[6] In my opinion, Mr. Talarico has failed to satisfy the test for granting a stay, and, therefore, this motion should be dismissed with costs on a partial indemnity basis fixed at $5,000, all inclusive, and payable forthwith.
[7] In his argument, Mr. Talarico’s persuaded me that there is a serious issue to be tried about whether the Law Society erred in dismissing Mr. Talarico’s motion for further disclosure from the Law Society. Indeed, the disclosure obligations of the Law Society under its legislation is an important and apparently unresolved legal issue.
[8] However, Mr. Talarico did not persuade me that there is a serious issue to be tried in his judicial review application. Rather, the Law Society persuaded me that there is strong authority that Mr. Talarico’s judicial review application will be dismissed as premature.
[9] The subtle point is that for the purposes of the stay motion, the issue to be considered is whether judicial review is available at this juncture of the discipline process. That is a different issue from whether the Law Society’s panel erred in refusing additional disclosure. Mr. Talarico has shown a serious issue to be tried about additional disclosure, but he has not shown a serious issue to be tried about the availability of judicial review at this juncture in the discipline proceedings.
[10] Mr. Talarico is confronted with the authority of Howe v. Institute of Chartered Accountants of Ontario, [1994] OJ No 1803 (C.A.) at paras. 9-10, which holds that a tribunal’s refusal to order the production of documents does not go to its jurisdiction. See also R. v. Patterson, [1970] S.C.R. 409; Pritchard v. Ontario (Human Rights Commission), 2004 SCC 31.
[11] The issue in Howe v. Institute of Chartered Accountants of Ontario was similar to the issues in the case at bar. The issue was whether adequate disclosure had been made to Mr. Howe, who was an accountant subject to a discipline hearing. Before the discipline committee had made its final disposition, Mr. Howe sought judicial review of the disclosure order made by the tribunal. With Laskin, J.A. dissenting, the Court of Appeal dismissed the judicial review application as premature. In this regard, Justice Finlayson stated in paras. 12- 15 of his judgment for the majority:
It seems to me that we are being asked to rule on the adequacy of the disclosure made to date by the prosecution when we do not have the means of gauging the significance of what has been disclosed against what is contained in the Johnston report. We do not have the Johnston report before us. We do not even have the 26-page "will say" statement. We do not know what ruling the panel of the Discipline Committee might make on this issue if it is raised again at any time during the hearing. We certainly do not know what final disposition will be forthcoming from the panel of the Discipline Committee that finally hears this matter, or what will happen if and when the appeal procedure is exhausted. In consequence, we are not in a position to identify and weigh the non-disclosure against the evidence actually given against the appellant.
In short, I agree with the Divisional Court that this application is premature. I think it is trite law that the court will only interfere with a preliminary ruling made by an administrative tribunal where the tribunal never had jurisdiction or has irretrievably lost it: see Gage v. Ontario (Attorney General) (1992), 90 D.L.R. (4th) 537 (Ont. Div. Ct.), and Roosma v. Ford Motor Co. of Canada Ltd. (1988), 66 O.R. (2d) 18, 53 D.L.R. (4th) 90 (Div. Ct.). In Gage, supra, the court found that the failure of the board of inquiry to provide a policeman with timely written notice of its decision to order a hearing into a complaint regarding his behaviour, pursuant to its statutory obligation, was a denial of natural justice which resulted in a loss of jurisdiction. In Roosma, supra, the court held that judicial review was open to challenge proceedings tainted with a fatal jurisdictional defect at the outset even where an appeal was provided.
It is not at all clear that a refusal to order production of documents goes to jurisdiction: see Patterson v. R., [1970] S.C.R. 409, 2 C.C.C. (2d) 227, much less that it is a denial of natural justice or a fatal flaw to the exercise by the tribunal of that jurisdiction. Additionally, on the pivotal question of whether the claim of privilege was valid, I am not persuaded on this record that the conclusion reached by the chair of the Discipline Committee is not reasonable. It seems to be conceded that the applicable legal principles are Wigmore's four tests and, that being so, normally we are obliged to defer to the unchallenged findings of fact and policy made by the chair: see Zurich Insurance Co. v. Ontario (Human Rights Commission), [1992] 2 S.C.R. 321, 93 D.L.R. (4th) 346.
I do not think that we should encourage applications such as these which have the effect of fragmenting and protracting the proceedings except in the clearest of cases. In my opinion, the Divisional Court was correct in exercising its discretion not to grant prerogative relief in this case.
[12] I thus conclude that the stay application fails on the first branch of the RJR – MacDonald test.
[13] If, however, I am wrong, in concluding that the first branch of the RJR – MacDonald has not been satisfied, in my opinion, Mr. Talarico’s motion for a stay also does not satisfy the second and third branches of the test.
[14] Mr. Talarico submits that he will suffer irreparable harm if the discipline hearing is not stayed. I, however, do not see irreparable harm in the requisite sense.
[15] If the disciplinary hearing proceeds before the judicial review application is determined, and Mr. Talarico is unsuccessful before the Hearing Panel, he has an unlimited right to appeal to a Law Society Appeal Panel, composed of five benchers, and a further unlimited right of appeal to Divisional Court, where his application for judicial review would no longer be regarded as premature. If Mr. Talarico is found guilty of professional misconduct, he will be able to argue that he was deprived of the disclosure that he ought to have received.
[16] I also do not see irreparable harm in the requisite sense from the fact that Mr. Talarico’s reputation will suffer from the discipline proceeding not being stayed. Any stay would be temporary, and there inevitably will be a discipline proceeding. Similarly, the fact that he will incur irrecoverable legal costs if the discipline proceedings begin is not a harm caused by not staying the discipline proceedings.
[17] Unfortunately, Mr. Talarico will inevitably incur irrecoverable legal costs and inevitably he will be taken away from practising law and inevitably he will suffer stress and worry in defending the discipline proceedings. Put somewhat different, there may be irreparable harm, but it will not be caused by refusing a stay, nor will it be avoided by granting a stay.
[18] The balance of convenience also does not favour granting a stay. Mr. Talarico is seeking to stay the discipline proceeding in order to have the court judicially review an order made as a part of the discipline process. Generally speaking, courts should avoid regulating the interlocutory orders of an administrative tribunal prematurely or by fragmented proceedings. See: Carter v. Phillips (1988), 66 O.R. (2d) 293 at pg. 295; Coady v. Law Society of Upper Canada, [2008] O.J. No. 2862 (Div. Ct.); Coady v. Law Society of Upper Canada, [2004] O.J. No. 4576 (Div. Ct.)
[19] In the absence of extraordinary circumstances, courts should not permit proceedings before tribunals to be fragmented. In the absence of extraordinary circumstances, courts ought not to entertain applications for judicial review in the absence of a final result and a full record from the tribunal. The inconvenience to Mr. Talarico is outweighed by the broad public interest in maintaining the integrity of the scheme for the regulation of the legal profession. See: Howe v. Institute of Chartered Accountants of Ontario, supra; Karkanis v. College of Physicians and Surgeons of Ontario, [2009] O.J. No. 1615; Smith v. Ontario (Security Commission), [2008] O.J. No. 4980 (Div. Ct.).
[20] In Karkanis v. College of Physicians and Surgeons of Ontario, supra, the applicant applied to stay disciplinary proceedings pending the results of an application for judicial review. Justice Swinton’s concern about the prematurity of the application for judicial review weighed "heavily" in her conclusion "that the balance of convenience favours the College". In Coady v. Law Society of Upper Canada, [2008] O.J. No. 2862 (Div. Ct.), the applicant applied for a stay of a disciplinary hearing pending the outcome of a judicial review application. In dismissing her application, this court noted that the applicant could address her concerns regarding late disclosure in her submissions, as well as in an appeal.
[21] In my opinion, the balance of convenience favours not staying the discipline proceedings.
[22] I, therefore, conclude that Mr. Talarico’s motion for a stay should be dismissed.
Perell, J.
Released: April 25, 2012
CITATION: Talarico v. The Law Society of Upper Canada 2012 ONSC 2493
COURT FILE NO.: 166/12
DATE: 20120425
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
Rosario Talarico
Applicant
‑ and ‑
The Law Society of Upper Canada, Professional Regulation Division and the Hearing Panel of the Law Society of Upper Canada
Respondents
REASONS FOR DECISION
Perell, J.
Released: April 25, 2012.