Walton v. Law Society of Upper Canada, 2015 ONSC 2480
DIVISIONAL COURT FILE NO.: 139/15
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: NORMA JEAN WALTON Appellant in appeal/Moving Party
AND:
LAW SOCIETY OF UPPER CANADA Respondent in appeal/Responding party
BEFORE: Lederer J.
COUNSEL: Moving Party in person Joshua Elcombe & Jan Parnega-Welch, for the Responding Party
HEARD at Toronto: April 13, 2015
ENDORSEMENT
1This is a motion for a stay of the enforcement of an order made by an Appeal Panel of the Law Society of Upper Canada.
2Norma Jean Walton was a lawyer. At present, she is a disbarred lawyer. Proceedings as to her status as a member of the Law Society of Upper Canada are ongoing. A Hearing Panel considered complaints concerning her activities as a lawyer, particularly her treatment of two clients whose money she used improperly to advance her own interests. The Hearing Panel made serious findings against her, including conclusions about her honesty and integrity. The Panel ordered an 18-month suspension, meaning that, during that period, Norma Jean Walton would be unable to practice law.
3The Law Society of Upper Canada was disappointed with some elements of the decision of the Hearing Panel. Among other things, it was unhappy with the penalty. It appealed the decision. The Appeal Panel found that the Hearing Panel had misapprehended some parts of the evidence. Contrary to the Hearing Panel, the Appeal Panel found that there was a scheme or program of misfeasance which Norma Jean Walton was engaged in. The nature of her actions and the complete lack of integrity were demonstrated such that the circumstances led inexorably to the conclusion that she should be disbarred.
4There is provision for an appeal to this court (see: Law Society Act, R.S.O. 1990 C. L. 8 s. 49.38). Norma Jean Walton has commenced one. With the commencement of the appeal, there is no automatic stay of the penalty put in place by the order of the Appeal Panel. For there to be a stay, it must be ordered by the Divisional Court (see: Law Society Act, s. 49. 41).
5It is the order of disbarment that Norma Jean Walton seeks to have stayed.
6It should be said that, in the absence of a stay, the Law Society does not wait long to act upon an order calling for disbarment. In this case, and, as I understand it, in most cases, disbarment occurs the day following the decision imposing the penalty is released. I confess it is not clear to me how one stays something that has already occurred. Nonetheless, in the absence of an automatic stay, but in the recognition that a motion for one may be brought, the Law Society Act foresees that possibility. Counsel for the Law Society advised that, if the order of the Appeal Panel is stayed, the disbarment would be withdrawn until the results of the appeal are known or, I presume, some other applicable order of the court is made.
7Counsel for the Law Society expressed concern that the disbarment could be set aside. The Law Society has a duty to protect the public. Without the disbarment, the suspension put in place by the Hearing Panel would be operative. Norma Jean Walton could not practice or act as a lawyer. Moreover, she has undertaken not to engage in practice until the appeal to this court has been dealt with and decided. Even so, the concerns of the Law Society remain. Without the disbarment, it would be possible that Norma Jean Walton could hold herself out as a lawyer, albeit not one in active practice, and leave out the fact that she had been suspended.
8Counsel has submitted that there is substance to this concern. In the days following the release of the finding of the Hearing Panel (but before its decision as to the appropriate penalty), Norma Jean Walton acted to put in place mortgages on property she owned with others and diverted funds to her own use without advising the other investors. These actions have been referred to by another judge of this Court as “theft”.1 This has generated more complaints and further administrative action by the Law Society. Quite apart from the suspension in this case, the Law Society, with the consent of Norma Jean Walton, has ordered an “interlocutory suspension” until these fresh complaints can be investigated and acted on. Evidently, the client has acted to place the assets of Norma Jean Walton in receivership and is pursuing her in the courts. For her part, Norma Jean Walton has undertaken to the court that, if a stay is granted, she would not hold herself out as anything other than a lawyer under suspension.
9Counsel for the Law Society submitted that the test on a motion to stay is the one found in RJR MacDonald Inc. v. Canada (Attorney General)2:
(a) Is there a serious issue to be tried?
(b) Is there irreparable harm? and,
(c) Where does the balance of convenience lie?
(a) Serious Issue
10If there is a serious issue to be tried, it would fall from the findings of the Appeal Panel. In considering whether there was a “scheme”, the Appeal Panel noted:
In our view, the panel misapprehended the evidence and thereby erred in law when it failed to characterize this as a ‘scheme’ or ‘pattern of conduct’.
11Finding some set of actions demonstrative of a “scheme” is not a legal determination. It is a finding of fact. The mere misapprehension of evidence does not change what is a finding of fact into an error of law. If it did, many, if not most, findings of fact with which an appellate court or appeal tribunal disagreed would be rendered an error of law. They are not. To overrule a finding of fact, there must be a “palpable and overriding error”.
12The Appeal Panel goes on to observe that the Hearing Panel “appears to have concluded that revocation required a finding that the Licensee engaged in a ‘scheme’ or ‘deliberate pattern of conduct’ ”(Emphasis added). It reviewed the jurisprudence to point out that revocation is not reserved only for the worst behaviour and criticized the Hearing Panel for relying on the fact that some of the decisions referred to by the Law Society involved more serious conduct. From this base, the Appeal Panel examined the circumstances and came to its own conclusion:
Against the backdrop of this jurisprudence, it is instructive to review the cumulative effect of the hearing panel’s own findings regarding the Respondent’s conduct, and the credibility of her excuses for this conduct when she appeared before the panel. These findings lead inexorably to the conclusion that the Respondent’s conduct went beyond honest mistakes, and indeed her conduct demonstrated serious failures relating to her integrity, probity and trustworthiness.
13The standard of review is reasonableness. The Appeal Panel makes reference to it. The upshot of its finding is to place its own interpretation on the facts and then conclude that there is no reasonable alternative other than disbarment. Based on the facts, as the Appeal Panel interpreted and applied them, there is only one answer. In cases such as this, deference is owed to the Hearing Panel if only because it is the body that actually heard the evidence. Did the Appeal Panel offer the Hearing Panel the deference it deserved?
14The issue is not whether Norma Jean Walton should be disbarred, but whether the appropriate tests were applied by the Appeal Panel. To my mind, these questions demonstrate a serious question to be tried. The threshold is commonly said to be low. In this situation, it is met. I am confirmed in this by reference to the factum filed on behalf of the Law Society:
The Law Society concedes that Ms. Walton’s Notice of Appeal appears to meet the threshold.
15In its factum and his submissions, counsel for the Law Society suggested that not much weight should be given to this factor. I do not agree. If we fail to follow our processes because we believe the ultimate answer is obvious (disbarment), we cannot continue to hold that the process protects us.
(b) Irreparable harm
16The harm to the public is limited in that Norma Jean Walton is suspended from practice and has undertaken not to practice until her appeal has been resolved. Nonetheless, counsel believes the potential for irreparable harm to the public remains. It may be that Norma Jean Walton cannot practice law and that she has undertaken not to represent herself as being anything other than a “lawyer under suspension” but, counsel believes, she could use the fact that she remains a lawyer to her benefit and the detriment of members of the public. He pointed out it would be difficult to enforce what she does in the future and the past provides reason for concern.
17On the other hand, Norma Jean Walton says that disbarment is a sanction that is difficult to recover from. Not everyone who knows of her disbarment will learn of her re-entry into the profession if she should succeed in her appeal. As it transpires, she has already been disbarred. She has already suffered whatever harm there is in being disbarred. The potential for this is accepted by the legislation which provides there is no stay without an order of the court.
18This speaks to what, for me, is the deciding factor. The overwhelming value at stake is the reputation of the legal profession. Given its place in society, the profession must clearly and completely demonstrate that the public is protected and that lawyers who misuse the trust of their clients will be held to account. Anything that detracts from this will damage the reputation of the profession in a way that can never be recovered.
(c) Balance of Convenience
19Norma Jean Walton is disbarred. To permit her to be reinstated, albeit while under suspension, in circumstances where she may be disbarred again if she is unsuccessful in her appeal, suggests a process that is unnecessarily complicated and convoluted. To my mind, in this case, it is better to leave things as they are and deal with the situation, as it is, after the appeal is completed.
20In all the circumstances, it is best that there be no stay. In time, the issues raised will be considered and determined. In the meantime, the role and reputation of the legal profession will be protected to the extent that is possible.
21The motion is dismissed.
22As agreed to by the parties, the Law Society, having been successful, is awarded costs of $500.00, payable after the receivership is lifted.
LEDERER J.
Date: 20150421
Footnotes
- DBCD Spadina Ltd. et al. v. Norma Walton et al., 2013 ONSC 6833, at paras. 12 and 17.
- 1994 117 (SCC), [1994] 1 S.C.R. 311, [1994] S.C.J. 17.