Law Society of Upper Canada v. Durno, 2014 ONSC 2993
DIVISIONAL COURT FILE NO.: 48/14
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
THEN, SWINTON AND LEDERER JJ.
BETWEEN:
THE LAW SOCIETY OF UPPER CANADA
Applicant
(Respondent in Appeal)
– and –
ROBERT GORDON DURNO
Respondent
(Appellant)
Sean Dewart and
Chris P. Donovan, for the Applicant (Respondent in Appeal)
Graeme A. Hamilton and
Ryan H. Clements, for the Respondent (Appellant)
HEARD at Toronto: May 13, 2014
SWINTON J. (orally)
1The appellant does not challenge the Appeal Panel’s finding that the Hearing Panel erred in law in holding that there was no fraud because the banks faced no elevated risk, given the value of the mortgaged property.
2The only submission made in oral argument by the appellant was that the Appeal Panel erred in failing to respect the Hearing Panel’s credibility finding with respect to the appellant’s evidence and in failing to respect the Hearing Panel’s conclusion that there was an honest belief on the part of the appellant that the banks had knowledge of the actual structure of the transactions.
3It appears that the Hearing Panel’s finding respecting honest belief was influenced by the Hearing Panel’s flawed legal analysis of fraud. This is demonstrated by para. 59 of the reasons where the Hearing Panel said:
The panel finds that the Respondent was not willfully blind to any risk that might have occurred but rather satisfied himself that the lenders were properly protected.
These words demonstrate that the Hearing Panel’s findings were premised on their view that the banks were not at risk in advancing the funds and, therefore, there was no fraud.
4The Appeal Panel recognized that the defence of honest but mistaken belief was available, but determined that the defence should be considered in the context of a proper understanding of what constitutes fraud in the circumstances of this case.
5The Appeal Panel properly recognized that it ought not to be making credibility findings. On that basis, it reasonably determined that the appeal should be allowed and the matter should be referred to a Hearing Panel differently constituted. That panel will be able to make the necessary credibility findings and assessment of the evidence respecting the defence of honest but mistaken belief in the context of a proper legal analysis of the elements of fraud.
6Accordingly, the appeal is dismissed.
THEN J.
COSTS
7I have endorsed the Appeal Book as follows, “This appeal is dismissed for oral reasons delivered by Swinton J. on behalf of the Court. Counsel have agreed that costs in the amount of $15,000 is fair and reasonable and accordingly the respondent shall have its costs in that amount payable within 90 days.”
SWINTON J.
THEN J.
LEDERER J.
Date of Reasons for Judgment: May 13, 2014
Date of Release: May 16, 2014
CITATION: Law Society of Upper Canada v. Durno , 2014 ONSC 2993
DIVISIONAL COURT FILE NO.: 48/14
DATE: 20140513
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
THEN, SWINTON AND LEDERER JJ.
BETWEEN:
THE LAW SOCIETY OF UPPER CANADA
Applicant
(Respondent in Appeal)
– and –
ROBERT GORDON DURNO
Respondent
(Appellant)
ORAL REASONS FOR JUDGMENT
SWINTON J.
Date of Reasons for Judgment: May 13, 2014
Date of Release: May 16, 2014