CITATION: Law Society of Upper Canada v. Mohammedally, 2015 ONSC 4040
DIVISIONAL COURT FILE NO.: 99/14 DATE: 20150622
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
SWINTON, D. L. CORBETT AND POMERANCE JJ.
BETWEEN:
THE LAW SOCIETY OF UPPER CANADA
Applicant
(Respondent in Appeal)
– and –
SAID MOHAMMEDALLY
Respondent
(Appellant)
Tanus Rutherford, for the Applicant (Respondent in Appeal)
Charles M. Loopstra, Q.C., for the Respondent (Appellant)
HEARD at Toronto: June 22, 2015
SWINTON J. (ORALLY)
[1] Said Mohammedally, the appellant, appeals from an order of the Law Society Appeal Panel dated March 27, 2014. The Appeal Panel upheld the finding of a Hearing Panel that the appellant had been duped into facilitating mortgage fraud and thereby committed professional misconduct through his representation of “flippers” in ten real estate transactions. The Appeal Panel reversed the Hearing Panel’s order on penalty and costs, replacing a reprimand with a three month suspension and increasing the costs award payable by the appellant from $5,000 to $20,000.
[2] Both parties agree that the decision of the Appeal Panel is reviewable on a standard of reasonableness.
[3] The appellant argues that the decision was unreasonable in three ways: the finding of professional misconduct, the substitution of a suspension for the reprimand, and the increase in costs despite his offer to settle and a mixed result before the Hearing Panel.
The Finding of Professional Misconduct
[4] The appellant concedes that there was negligence, but takes the position that the negligence did not amount to professional misconduct. He submits that the Appeal Panel and Hearing Panel used hindsight in finding professional misconduct, failing to realize that the appellant had a gradual awareness of possible fraud over time, and he did make some inquiries which satisfied him initially. As well, there was less knowledge of value fraud at the time.
[5] “Professional misconduct” means conduct in a lawyer’s professional capacity that tends to bring discredit upon the legal profession: Rules of Professional Misconduct, 2003, Rule 1.02.
[6] The Hearing Panel held that the appellant’s conduct fell “well below” the standard of a reasonable practitioner in a number of areas, setting out particulars at para. 50 of its Reasons.
[7] The Appeal Panel held that the appellant’s conduct could reasonably be regarded as a failure to be on guard, noting the reasons given by the Hearing Panel and adding others at paras. 41-43 of its Reasons. At para. 44, the Appeal Panel concluded:
In summary, there was considerable evidence, even accepting what the Lawyer had to say, that enabled the majority to reasonably conclude that he had engaged in professional misconduct by failing to be on guard. Of course, we recognize that some of the circumstances cited by both the majority in its reasons and by the Lawyer in argument constituted significant mitigating factors on penalty.
[8] It was reasonable for the Appeal Panel to affirm the finding of professional misconduct, given the appellant’s conduct over the course of ten transactions with multiple red flags. The Appeal Panel reasonably concluded that a lawyer who repeatedly fails to be on guard against fraud brings discredit on the legal profession and accordingly commits professional misconduct.
The Penalty of Suspension
[9] The appellant argued that the Appeal Panel failed to give appropriate deference to the Hearing Panel’s penalty decision and that the penalty of suspension is inappropriate given the appellant’s conduct, the penalties in other cases and the impact of a suspension on him.
[10] The Appeal Panel held that the Hearing Panel had taken irrelevant factors into account when coming to its decision on penalty, such as the lack of due diligence of the lenders. The Hearing Panel also made findings unsupported by the evidence, and the Hearing Panel gave insufficient consideration to the overarching objective of maintaining public confidence in the legal profession. Given the errors of the Hearing Panel, the Appeal Panel reasonably substituted its own view of the appropriate penalty.
[11] The Appeal Panel considered a variety of factors and concluded that “a reprimand falls well outside the range of reasonable outcomes” (see para. 72 of the Reasons). The Appeal Panel concluded that “in the very particular circumstances”, a three month suspension would be fit.
[12] In our view, the three month suspension imposed was a reasonable penalty in the circumstances.
The Costs Decision
[13] The Appeal Panel held that the Hearing Panel erred in applying the costs principles with respect to offers to settle in civil proceedings to a discipline hearing, given the differences between a civil action and a disciplinary proceeding - notably, the obligation of the Law Society to act in the public interest.
[14] The Appeal Panel held that the Society was not acting unreasonably in rejecting the proposed settlement and asking a Hearing Panel to adjudicate whether the appellant was knowingly involved in multiple mortgage frauds. It also held that the mixed results warranted a substantial discount in the Society’s requested costs.
[15] Again, the costs award was a reasonable one.
Conclusion
[16] For these reasons, the appeal is dismissed.
[17] I have endorsed the Appeal Book, “This appeal is dismissed for oral reasons delivered today. The three month suspension shall commence October 1, 2015. Costs to the respondent fixed at $10,000 all inclusive, an amount that is fair and reasonable for an appeal of this complexity, payable on the schedule in para. 5 of the Appeal Panel’s order.”
___________________________ SWINTON J.
D. L. CORBETT J.
POMERANCE J.
Date of Reasons for Judgment: June 22, 2015
Date of Release: June 25, 2015
CITATION: Law Society of Upper Canada v. Mohammedally, 2015 ONSC 4040
DIVISIONAL COURT FILE NO.: 99/14 DATE: 20150622
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
SWINTON, D. L. CORBETT AND POMERANCE JJ.
BETWEEN:
THE LAW SOCIETY OF UPPER CANADA
Applicant
(Respondent in Appeal)
– and –
SAID MOHAMMEDALLY
Respondent
(Appellant)
ORAL REASONS FOR JUDGMENT
SWINTON J.
Date of Reasons for Judgment: June 22, 2015
Date of Release: June 25, 2015