Tarek El-Hennawy et al. v. The Law Society of Upper Canada

CITATION: Tarek El-Hennawy et al. v. The Law Society of Upper Canada, 2014 ONSC 375

DIVISIONAL COURT FILE NO.: 59/13

DATE: 2014-01-28

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

THEN R.S.J., HIMEL AND SACHS JJ.

BETWEEN:

TAREK EL-HENNAWY, REEM EL-HENNAWY, SUZAN FARESS, MOHAMED FARESS, SIHAM EL-HENNAWY, DALIA MOHAMED, AND FARES EL-HENNAWY (INFANT) AND OMAR EL-HENNAWY (INFANT) BY THEIR LITIGATION GUARDIAN DALIA MOHAMED Applicants

– and –

THE LAW SOCIETY OF UPPER CANADA Respondent

COUNSEL:

Victor L. Freidin, Q.C., for the Applicants

M. Jill Dougherty and Jordan S. Glick, for the Respondent

HEARD: December 3, 2013

REASONS FOR JUDGMENT

HIMEL J.:

[1] The applicants apply for judicial review of a decision of the Compensation Fund Committee (the “Committee”) of the Law Society of Upper Canada (“LSUC”) dated May 9, 2012. In the decision, the Committee awarded compensation to two claimants, but denied compensation for the remaining claimants (the “applicants”). The applicants request that the Committee’s decision be quashed, and that the court order the payment of grants as recommended by the Law Society’s Referee. Alternatively, the applicants request that the matter be referred back to the Committee with directions. They also seek an increase in the costs recommended by the Referee and ordered by the Committee, or alternatively, to have the issue of costs referred back to the Committee with directions. The respondent LSUC opposes the application for judicial review and asks that it be dismissed.

Factual Background

The Nature of the Claims

[2] The applicants are all members of the same extended family. They lost money as a result of lawyer Mariano Mazzucco’s (“Mazzucco”) dishonesty. For many years, he had been the lawyer for the family patriarch, Hussein El-Hennawy (“El-Hennawy”), and Lakefront Star (“LFS”), a corporation controlled by El-Hennawy. Mazzucco’s practice was seized by the LSUC on March 27, 2008. El-Hennawy says that between November 14, 2007 and February 29, 2008, he assigned a total of approximately $930,000 to Mazzucco. The reason for this was that he was experiencing delays and having difficulty in his dealings with conventional banks since the terrorist attacks on September 11, 2001, following which regulations were enacted to curb the international transfer of large amounts of cash. El-Hennawy claims that he assigned much of these funds (which remained on deposit with Mazzucco) to his family members.

[3] The assignments were documented and had acknowledgment letters signed by the adult assignees and Mazzucco. The letters confirmed the amounts assigned, and stated that Mazzucco was holding the funds in trust for specified applicants. They contained a description of the type of transaction intended for the funds, as well as the planned involvement of Mazzucco as the assignee’s solicitor on each transaction. For example, the funds held for Reem El-Hennawy and Walid Darwish were for a house purchase, while Mohamed Faress, Suzan Faress, Siham El-Hennawy, Tarek El-Hennawy and Dalia Mohammed were looking for an income-producing property.

[4] The LSUC received information from the Royal Bank following an investigation that revealed that Mazzucco had engaged in mortgage fraud activities and other improprieties. The LSUC obtained a trusteeship order over Mazzucco’s practice on March 26, 2008. By this time, the applicants’ monies were gone.

[5] Mazzucco had signed promissory notes acknowledging he was holding the money in trust, that he was acting as solicitor and that the monies were to be used for legal transactions. The employee of the LSUC who was charged with carrying out the terms of the trusteeship order went to the office of Mazzucco and took possession of it. She testified that she located hundreds of promissory notes in his office and located 45 to 50 files dealing with the applicants, but these files did not contain any promissory notes. It was only after the trusteeship order was made on March 26, 2008, and after the removal of the documents and files from the lawyer’s office, that the promissory notes signed by him in favour of the applicants began to appear.

The Compensation Fund

[6] The applicants filed separate claims under s. 51 of the Law Society Act, R.S.O. 1990, c. L. 8 (the “Act”) to recover their losses from the LSUC’s Compensation Fund (the “Fund”). The Fund is intended to provide compensation to individuals for losses sustained as a result of a lawyer’s dishonesty. Each claimant for compensation can claim a maximum of $100,000. Section 51(5)(a) of the Act provides as follows:

Grants

(5) Convocation in its absolute discretion may make grants from the Fund in order to relieve or mitigate loss sustained by a person in consequence of,

(a) dishonesty on the part of a person, while a licensee, in connection with his or her professional business or in connection with any trust of which he or she was or is a trustee.

[7] Convocation has delegated its discretion to make grants in excess of $5,000 to the Committee. Convocation has also issued “General Guidelines for the Determination of Grants from the Compensation Fund” to ensure consistency in the administration of the Fund. The Guidelines provide as follows:

1. It must be shown that, at the time the lawyer licensee received funds or property of a claimant,

(a) a solicitor and client relationship existed between the claimant and the lawyer, and that

(b) the lawyer received funds or property of the claimant in his or her capacity as a lawyer, and that

(c) the claimant’s loss was in consequence of dishonesty, on the part of the lawyer, in connection with such lawyer’s professional business.

The Report of the Referee

[8] The claims were assigned to Referee C. Anthony Keith, Q.C. (the “Referee”) to conduct an inquiry and deliver a report with non-binding recommendations to the Committee. After a ten-day hearing, the Referee recommended payment to each applicant. In his report, he outlined the relevant statutory provisions and Guidelines that apply to payment of grants from the Fund. He accepted the validity of the claims that El-Hennawy had assigned money to each of his family members, and found that the applicants’ uses of Mazzucco’s services were related to the practice of law. Given the difficulties that El-Hennawy had with conventional banks, the Referee found it was reasonable for the applicants to keep their money in trust with Mazzucco for use in future transactions. The Referee described this practice as using Mazzucco as a “bank of convenience”. While he mentioned the Guidelines, the Referee did not analyze whether the applicants had satisfied them.

[9] The Referee noted that an LSUC employee gave evidence that none of the promissory notes documenting the assignment of money from El-Hennawy were recovered from Mazzucco’s office, and that this was a departure from Mazzucco’s practice of keeping related documents together. The Referee characterized the LSUC as having an “underlying suspicion…that the claims…had been carefully arranged so as to avoid the per claimant limits for payments out of the Fund.” However, the Referee concluded that he was unable to make that finding, and that he must accept the evidence supporting the claims and recommend that the grants be paid as claimed. The Referee recommended payment of the full amount of the claims up to the $100,000 limit of the Fund. He recommended that a total of $905,000 be paid to the various claimants.

The Compensation Fund Committee’s Decision

[10] The Committee did not have the entire transcript of the inquiry conducted by the Referee before it. It received his report and gave the parties an opportunity to make written submissions with references to the transcript and exhibits. In its decision, the Committee did not accept all of the Referee’s recommendations. The Committee began by noting that the Referee’s recommendations were non-binding, but that it owed the Referee’s findings of fact a degree of respect and deference. It also noted that Convocation had “absolute discretion” as to whether a grant is issued, and was therefore entitled to issue guidelines that narrowed the scope of that discretion. The Committee also said that it has exclusive jurisdiction to make awards from the Fund over $5,000, and that it was at liberty to accept or reject the Referee’s recommendations in whole or in part. The Committee noted that it was free to depart from the Guidelines if warranted in the circumstances.

[11] The Committee accepted the Referee’s recommendation regarding Hussein El-Hennawy and LFS, and awarded each $100,000. The Committee did not accept the Referee’s recommendation to pay the claims of the other claimants. It held that the Referee had failed to adequately consider the requirements and implications of the Guidelines adopted by Convocation. The Committee’s decision was based on its finding that the applicants’ misappropriated monies were not received by Mazzucco “in his capacity as a lawyer”, and that their loss was not a result of Mazzucco’s dishonesty “in connection with his professional business”, as described in the Guidelines.

[12] The Committee held that most of the cash deposited by El-Hennawy was not deposited in anticipation of Mazzucco performing any specific legal services. The monies were deposited simply for safekeeping. On that basis, it held that Mazzucco was receiving money in his capacity as a bank or banker, and not as a lawyer. The Committee found that the funds assigned were not sufficiently connected to Mazzucco’s practice of law, but rather in connection with his unorthodox business of acting as a custodian or banker. They were never part of his trust account, not received as a retainer and not delivered for any specific professional engagement. The funds were not given to Mazzucco with any specific instructions, such as to invest them; Mazzucco was simply told to hold them pending further instructions. While the losses of LFS and El-Hennawy were in connection with Mazzucco’s practice of law, the Committee held that the losses of the other applicants were not. The Committee dismissed the claims of the other applicants.

The Supplementary Report of the Referee and the Committee’s Decision on Costs

[13] Section 51(12) of the Act allows the payment of costs of administering the Fund, including the costs of “investigations and hearings and all other costs, salaries and expenses necessarily incidental to the administration of the Fund” to be paid out of the Fund. The Guidelines provide that ordinarily, the payment of interest or costs, expenses or damages to claimants will not be made out of the Fund. There are some exceptions. The Guidelines allow for a discretionary payment for counsel fees of $500. This amount may be increased in complicated cases for preparation of claim documents and final resolution of the claim. The Guidelines also allow payment of $800 per day in the discretion of the Referee if a hearing is held.

[14] The applicants requested disbursements of $40,576.33, of which $33,934.98 was paid for an expert report prepared by an accountant. They requested a significantly larger amount for their legal costs. In a Supplementary Report, the Referee held that he had no jurisdiction to recommend compensation for disbursements in preparing the claims. This was despite the fact that the Referee had questioned during the hearing whether anyone had thought about having an independent accountant review the situation.

[15] The Referee noted that the applications and the hearing were “complicated” and warranted an increase from the suggested limit of $500 for counsel fees. He recommended $41,250 in counsel fees to the applicants for the preparation of claim documents. This amount was based on the Referee’s recommendation that counsel be compensated for 275 hours at a rate of $150 per hour. Although the applicants had requested approximately 550 hours at a rate of $395 per hour, the Referee noted that the upper limit for the claims was $100,000 regardless of the loss, and that standard rates paid to referees by the LSUC are modest. He also recommended a further $7,600 for 9.5 days of hearing at $800 per day. He held that he had no discretion to change the $800 counsel fee. The total amount recommended was $48,850. The applicants allege that this effectively represents a rate of $75 per hour, and only 17% of the total amount claimed.

[16] The Committee adopted the Referee’s analysis, but reduced the award for fees to $6,875 to reflect its decision to deny 5/6 of the claims (10 of 12 claimants). The Committee did not disturb the counsel fee award of $7,600, and did not comment on the Referee’s statement that he did not have jurisdiction to award disbursements. The total costs award made by the Committee was $14,475 ($7,237.50 for each successful claimant).

Issues on this Application

[17] The issues raised in this application are as follows: (1) whether Convocation had jurisdiction to establish Guidelines to structure the Committee’s exercise of discretion in making grants from the Compensation Fund; and (2) whether the Committee acted properly in deciding to apply the Guidelines in this case.

Positions of the Parties

[18] The applicants submit that the Guidelines are ultra vires because they are inconsistent with the Act. In this regard, the applicants argue that the Guidelines impose stricter requirements for obtaining compensation than required by the Act.

[19] The applicants also argue that the money they gave to Mazzucco was for specific transactions. They intended Mazzucco to act as their solicitor on these transactions. They argue that they left money with him because they trusted him as a lawyer. Moreover, they could not earn interest on money put into a bank and they thought it best to leave the monies with him. Mazzucco signed a “global” promissory note for $425,000 on March 26, 2008, because the applicants were going to purchase an income producing property—they were close to buying something and wanted to make sure that all the investors were 100% committed to the purchase.

[20] The applicants submit that the conclusion of the Committee did not meet the standard of correctness, nor did it fall within the range of acceptable outcomes. The conclusion did not give effect to the intent and purpose of the Fund of providing compensation to persons harmed by a lawyer’s dishonesty. They argue that not only is this a personal loss to the applicants, the public’s confidence in the Compensation Fund and the legal system will be adversely affected if the decision is not quashed and the costs award is not increased.

[21] The respondent takes the position that Convocation was entitled to establish the Guidelines to structure the exercise of its broad discretion to make grants from the Compensation Fund. It did not require express statutory authority to do so. It argues that the Guidelines are consistent with the provisions of the Act, and more broadly with the purpose and intent of the Act and the Fund. The Guidelines contemplate that there must be some nexus between the dishonesty of the lawyer and his or her capacity as a lawyer and legal practice before access to the Fund may be granted. The Fund is not designed to provide complete compensation to persons harmed by the dishonesty of anyone who happens to be a lawyer in whatever capacity. Rather, it is intended to enable Convocation to relieve or mitigate on a discretionary basis certain losses that are a consequence of a lawyer’s dishonesty in connection with his or her professional business, being the practice of law. Requiring such a nexus is consistent with the statutory framework, the purpose of the Fund and the fact that there are limited resources with respect to the Fund.

Standard of Review

[22] The applicants acknowledge the presumptive standard of review applicable to a decision of a tribunal is reasonableness when it is interpreting its home statute. However, where the matter involves questions of law that are of central importance to the legal system and outside the adjudicator’s expertise, the correctness standard applies. They argue that the Committee does not have any greater expertise than a court on the issues of whether Mazzucco was acting in his capacity as a lawyer, whether the Guidelines are ultra vires, whether the loss sustained was in connection with the lawyer’s professional business and whether the decision is inconsistent with the intent and purpose of the Act. Therefore, the Committee’s decision is subject to review on a standard of correctness.

[23] The respondent asserts that the validity of the Guidelines is a question of law concerning statutory interpretation and alleged unlawful fettering of discretion. They agree that that aspect of the Committee’s decision is reviewable on the correctness standard. All other aspects of the Committee’s decision are reviewable on the reasonableness standard. The respondent submits that considerable deference should be given to the Committee’s decision in its exercise of discretion. This includes deciding whether to apply the Guidelines, whether to make or decline grants from the Fund, whether to award costs, as well as the Committee’s interpretation of the Act and the Guidelines.

[24] We agree with the respondent that when the Committee is interpreting its home statute, its decisions are reviewable on a reasonableness standard. Considerable deference should be given to the Committee’s exercise of discretion and application of the Act to the decision-making function: see Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190. For the correctness standard to apply, the question has to be not only one of central importance to the legal system, but also outside the adjudicator’s specialized area of expertise: Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association, 2011 SCC 61, [2011] 3 S.C.R. 654 at paras. 39, 46. We conclude that the matters before the Committee (other than the issue of alleged unlawful fettering of discretion) fell within its area of expertise and that the appropriate standard of review of its decision is one of reasonableness.

[25] We further conclude that the appropriate standard of review of the Committee’s decision on costs is reasonableness. The question of costs falls within the core function and expertise of the Committee relating to the interpretation and application of its enabling statute: see Dunsmuir at para. 54; and Canada (Canadian Human Rights Commission) v. Canada (Attorney General), 2011 SCC 53, [2011] 3 S.C.R. 471, at paras. 25-27.

Decision

Does Convocation have jurisdiction to pass Guidelines, and does the Guidelines’ requirement for a nexus between the loss and the lawyer’s professional business fetter the discretion of the Committee?

[26] Section 51(5) of the Act provides as follows:

Convocation in its absolute discretion may make grants from the Fund in order to relieve or mitigate loss sustained by a person in consequence of,

(a) dishonesty on the part of a person, while a licensee, in connection with his or her professional business or in connection with any trust of which he or she was or is a trustee;

[27] Pursuant to section 51(10) of the Act, Convocation may delegate any of those powers to a committee of Convocation. Convocation has delegated the discretion to make grants from the Fund in amounts over $5,000 to the Compensation Fund Committee. The Committee is authorized by LSUC By-law No. 12 to “make such arrangements and take such steps as it considers advisable to carry out its responsibilities”: see Law Society of Upper Canada, By-law No. 12, Compensation Fund (May 1, 2007), s. 4.1. Grants are discretionary. The Act contemplates that to be eligible for compensation from the Fund, the claimant’s loss must arise from the lawyer’s dishonesty in connection with his or her legal practice and related business operations. The Rules of Professional Conduct and the by-laws contemplate that lawyers are only to use their trust accounts for purposes related to the provision of legal services, and thus the references to a trust in the Guidelines and the Act also require a nexus with the lawyer’s professional business.

[28] The intent of the Compensation Fund is to protect the public in its dealings with members of the LSUC. The Guidelines are reflective of the policy requiring a nexus between the dishonesty and the lawyer’s professional business.

[29] Guideline 1(b) states that:

It must be shown that, at the time the lawyer licensee received funds or property of a claimant, the lawyer received funds or property of the claimant in his or her capacity as a lawyer.

[30] Convocation’s authority to establish these Guidelines is derived from its absolute discretion to make grants from the Fund. The Guidelines are a way of structuring the exercise of that discretion and providing some consistency. We agree that Convocation was entitled to establish these Guidelines and required no express statutory authority to do so. The Guidelines recognize that there must be some nexus between the lawyer’s dishonesty and his or her capacity as a lawyer and legal practice before there will be access to the Fund. The Fund is not unlimited, and outlining this nexus is consistent with the statutory framework. We respectfully disagree with the applicants’ position that the Guidelines are ultra vires because they apply an additional and stricter requirement than the Act concerning the nexus between the dishonesty of the lawyer and his or her professional business. The Guidelines expand on the criteria regarding eligibility for grants from the Fund. They are not inconsistent with the Act because the Act does not provide that any claimant is entitled to receive a grant if they meet the threshold criteria in s. 51(5). We find that the provisions of the statute and the Guidelines are consistent.

[31] Further, the Guidelines are non-binding and do not fetter the Committee’s discretion. Guidelines are helpful by allowing applicants to know in general terms what the policy and practices are. The case law recognizes the authority of statutory tribunals to pass guidelines governing their broad exercise of discretion so long as these guidelines are recognized as being non-binding.: see Maple Lodge Farms v. Canada 1982 24 (SCC), [1982], 2 S.C.R. 2, at pp. 4-5; and Ainsley Financial Corp. v. Ontario (Securities Commission) (1994), 1994 2621 (ON CA), 121 D.L.R. (4th) 79 (Ont. C.A.), at pp. 83-86. In this case, the Committee accepted that it was free to depart from the Guidelines and the Committee properly considered the relationship of the Guidelines to the Act and the manner in which they were to be applied.

Was the decision to decline a grant of funds to the Applicants reasonable?

[32] The applicants argue that the Committee’s decision that Mazzucco was not acting in his capacity as a lawyer is unreasonable. According to the applicants, the fact that the recipient of the funds was a licensed solicitor should satisfy any capacity issue. Alternatively, the issue should be determined based upon the belief of the parties. The applicants submit that the only reasonable conclusion is that Mazzucco was acting in his capacity as a lawyer given that accepting money from an individual for investment purposes is regarded as a traditional function of a lawyer by the LSUC. The applicants submit that the Committee’s conclusion is not in keeping with the jurisprudence, and reliance on the case of Patchett v. Law Society of B.C. (1979), 1978 1936 (BC SC), 92 D.L.R. (3d) 12 (BCSC) is not justified.

[33] The applicants further argue that the Committee erred in characterizing Mazzucco’s function as a “banker”, and that the claimants used Mazzucco as a “bank of convenience.” They submit that the Referee was only referring to Hussein El-Hennawy in this regard because he deposited cash with the lawyer for the purpose of avoiding difficulties encountered with Canadian banks. They further argue that even if Mazzucco was holding the funds as a banker, the Committee failed to consider whether a lawyer could hold trust funds in the capacity of both a banker and a lawyer. They submit that Mazzucco received the money in this dual capacity. They argue that it is unfair and unreasonable to prejudice the applicants’ claims because Mazzucco did not deposit the trust funds in his trust account.

[34] The respondent argues that the Committee’s conclusion that Mazzucco did not receive funds in his capacity as a lawyer or in connection with his professional business is reasonable. It submits that the finding is consistent with the jurisprudence, and should not be disturbed.

[35] The standard of reasonableness is a deferential standard that “shows respect for an administrative decision-maker’s experience and expertise”: see Canada (Canadian Human Rights Commission) v. Canada (Attorney General) at para. 29. The Supreme Court explained that “[d]eference to an administrative tribunal reflects recognition of interpretive choices. Such a recognition makes it possible to ask whether the tribunal or the court is better placed to make the choice (Macklin, at p. 205).”

[36] The Committee applied the Guideline concerning the nexus between the loss and the dishonesty of the lawyer acting in his professional capacity, as contained in the Act. It found that the nexus did not exist in the case of the applicants, but did exist in the case of Hussein El-Hennawy and LFS. It based its conclusion on the evidence before it concerning the relationships between Mazzucco and the parties, as well as the nature of the legal services provided to Hussein and LFS. The Committee determined that Mazzucco did not receive the funds from the applicants in his capacity as a lawyer or in connection with his professional business.

[37] This conclusion is consistent with other jurisprudence that recognizes the different capacities in which a lawyer may act, and that the capacity in which the lawyer received the money is the relevant question in deciding whether compensation should be granted: see Singh v. Law Society (Alberta), 2008 ABCA 260, [2001] 3 W.W.R. 419, at para. 36; Riviera Development Corporation v. Law Society (Saskatchewan) (1992), 1992 8281 (SK CA), 91 D.L.R. (4th) 417, at pp. 431-432. In Patchett, the Supreme Court of British Columbia outlined, at p. 45, circumstances where funds could be regarded as being received in the solicitor’s capacity as a lawyer. That the person receiving the funds was a lawyer at the time of receipt is not the determining factor. Rather, the question is whether the funds were received in connection with the provision of “professional services”: see Cassels Brock & Blackwell LLP v. LawPRO (2007), 2007 ONCA 122, 85 O.R. (3d) 318 (C.A.), at paras. 7-8.

[38] The Committee analyzed all of the appropriate factors in coming to its decision. It considered whether Mazzucco had provided legal services to the applicants, whether the funds were provided in connection with any particular transaction and the capacity in which Mazzucco received the funds. It noted that he had not been retained to perform legal services, or retained with respect to a specific legal transaction, nor was he retained to assist with or advise on an investment process. He was merely told to hold the funds pending further instruction, and he never provided any investment or legal services concerning the funds. They were not deposited to a trust account, were not received as a retainer and were not earmarked for any particular transaction. The Committee found that the applicants’ intended uses of the lawyer’s services following the assignments were “extremely vague”. The Committee concluded that the claimants’ losses were not in consequence of dishonesty in connection with the lawyer’s professional business. Given the long standing relationship between Hussein and Mazzucco, the Committee refused to find that his practice of depositing cash with the lawyer in trust was careless. In light of the history of legal services that Mazzucco had provided to Hussein and Lakefront (in contrast to the lack of legal services that Mazzucco had provided to the other applicants), the Committee upheld the grants to Hussein and Lakefront Star and dismissed the other applications.

[39] In reaching this conclusion, the Committee considered factors that were consistent with the jurisprudence. While the term “in connection with” is to be given a “plain but expansive meaning”: see 725410 Ontario Inc. v. Gertner, 2011 ONSC 6121, at para. 32, the term is not so broad as to include the deposit of funds not related to a legal transaction or to the provision of some legal service. Accordingly, the Committee’s decision was reasonable. It was justified, transparent and intelligible, and fell within a range of possible and acceptable outcomes that are defensible in respect of the facts and law: see Dunsmuir, at para. 47. We see no basis to interfere with that conclusion.

Was the decision of the Committee on costs reasonable?

[40] Section 51(12) of the Act provides:

There may be paid out of the Fund the costs of its administration, including the costs of investigations and hearings and all other costs, salaries and expenses necessarily incidental to the administration of the Fund.

[41] In his report, the Referee wrote that he did not have jurisdiction under the Act to award disbursements to a party. The Committee did not disagree with that conclusion. Section 51(12) does not contemplate an award of disbursements incurred by the parties. Rather, it refers to costs that are “necessarily incidental to the administration of the fund”. Neither the Act nor the Guidelines refer to the payment of disbursements. The Guidelines do provide for the payment of counsel fees, but state that the payment of “costs, expenses or damages incurred or suffered by the claimant will not be made out of the Fund”. Counsel fees may be allowed up to a total of $500, and this may be increased in complicated cases for preparation of claim documents and final resolution of the claim. An additional $800 per day in the discretion of the referee may be paid for attendance at a hearing.

[42] The Committee’s decision not to interfere with the Referee’s recommendation concerning the lack of jurisdiction to award disbursements is a conclusion that falls within the range of possible and acceptable outcomes.

[43] With reference to the Committee’s decision on costs, the Committee was not bound to accept the Referee’s report. It considered appropriate factors in exercising its discretion, including the success of the parties, the legislation and the Guidelines, the amount of money at issue and the purpose and spirit of the Fund. It exercised its discretion to award costs higher than the Guidelines because of the complicated nature of the case. The Guidelines contemplate modest counsel fees and costs for preparing documents. The Committee accepted the Referee’s view that enhanced costs were justified by awarding $6,875 instead of the $500 contemplated by the Guidelines, for a total of $14,475 to El-Hennawy and LFS. The Committee reasonably reduced the amount recommended by the Referee to reflect the success of the applicants. That decision was reasonable and should not be disturbed.

Result

[44] For the reasons outlined above, the application for judicial review of the Compensation Fund Committee’s decision refusing the applicant’s claims is dismissed. The application for judicial review of the Compensation Committee’s decision concerning the issue of costs is also dismissed.

[45] If the parties are unable to agree on the issue of costs, they may file written submissions according to the following timetable: the LSUC shall file submissions by February 20, 2014, and the applicants by February 28, 2014.

THEN R.S.J.

HIMEL J.

SACHS J.

Released: January 28, 2014