Court File and Parties

CITATION: Walton v. Law Society of Upper Canada, 2017 ONSC 3847

DIVISIONAL COURT FILE NO.: 139/15

DATE: 20170628

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Norma Jean Walton, Appellant AND: The Law society of upper canada, Respondent

BEFORE: Kiteley, Nordheimer, D. Edwards, JJ.

COUNSEL: Howard C. Cohen and Jessica S. Parise, for the Appellant Jan Parnega-Welch and Joshua Elcombe, for the Respondent

HEARD at Toronto: June 21, 2017

ENDORSEMENT

KITELEY J.

Background

[1] In a decision dated July 25, 2013, the Hearing Panel of the Law Society found the appellant had committed professional misconduct with respect to seven particulars (including misleading a client, conflicts of interest, and related misconduct) and dismissed the remaining three particulars regarding misleading communications with Law Society investigators, filing false or misleading Member’s Annual Reports (MARs) and misappropriation. In a decision dated May 16, 2014, the Hearing Panel imposed a penalty of a suspension for 18 months and in a subsequent decision the Hearing Panel ordered the Appellant to pay costs in the amount of $172,000.

[2] The Law Society appealed from the dismissal of three particulars of misconduct and from the decision as to penalty. In a decision dated February 8, 2015, the Appeal Panel set aside the penalty of suspension and substituted an order for revocation of the appellant’s licence. The Appeal Panel also overturned the dismissal of two of the remaining allegations and substituted findings of professional misconduct with respect to misleading Law Society investigators and filing false or misleading MARs. The Appeal Panel declined to address the appeal of the third particular.

[3] The Hearing Panel heard six days of evidence in 2012. The evidence included a twenty page agreed statement of facts in which each of the transactions in question was outlined and documented and in which the appellant made many admissions. The Appeal Panel dealt with a written record and did not receive oral evidence.

[4] This is an appeal of the order of the Appeal Panel in which the appellant asks that the order of the Hearing Panel be reinstated. At the conclusion of submissions by counsel for the appellant, this court dismissed the appeal with reasons to follow. These are those reasons.

Jurisdiction and Standard of Review

[5] Pursuant to s. 49.38 of the Law Society Act the licensee has the right to appeal from the Hearing Panel to the Appeal Panel and, pursuant to s. 49.39 from the Appeal Panel to the Divisional Court “on any grounds”. Both parties agree that the Appeal Panel’s decision on penalty is subject to review on a standard of reasonableness. In addition, I agree with counsel for the Respondent that a high degree of deference is owed to the remedial decisions of a professional regulatory tribunal in a disciplinary context where one of its mandates is to protect the public. (Law Society of New Brunswick v. Ryan [2003] S.C.C. 20)

[6] I accept the submission of counsel for the Respondent that the Appeal Panel serves as the dedicated appellate tribunal for Law Society discipline hearings. The Appeal Panel’s exclusive role is to review decisions by the Hearing Panel, and is therefore presumed to have expertise in performing that specialized function. The fundamental elements of this role include interpreting appeal records, deciding questions of law, and applying the law in the unique context of Law Society discipline appeals. One of the Appeal Panel’s routine tasks is to assess the reasonableness of penalties imposed by the Hearing Panel based on the appeal record and the Law Society case law, applying the law on the standard of review. Accordingly, the Appeal Panel is entitled to deference in its own application of the standard of review in the Law Society’s appeal of the Hearing Panel. (Byrnes v. LSUC 2015 ONSC 2939 para 131)

Analysis

[7] I am satisfied that the decision of the Appeal Panel as to penalty was reasonable for these reasons. Contrary to the submission on behalf of the appellant, the Appeal Panel did not disregard findings of fact made by the Hearing Panel. The Hearing Panel had rejected the appellant’s credibility with respect to all of the findings at issue at the penalty hearing at which she did not give evidence. The Appeal Panel relied on those findings. As indicated in paragraph 51 of the respondent’s factum, the Appeal Panel’s decision is well supported by the Hearing Panel’s reasons on both the findings of misconduct (in particulars 1 to 6 and 10) and on the penalty. Those reasons repeatedly impugned the appellant’s honesty, integrity and trustworthiness. The Appeal Panel upheld the finding that the appellant’s integrity was “questionable”.

[8] The Hearing Panel referred to the many decisions relied on by the Law Society in support of its argument that revocation was the appropriate penalty and to the many decisions relied on by the appellant. The Hearing Panel referred at length to the decision in Law Society of Upper Canada v. Kazman 2008 ONLSAP 7 and quoted from paragraphs 73 to 75 with reference to the decision in Bolton v. Law Society [1994] 1 W.L.R. 512 (C.A.). At paragraph 18 the Hearing Panel concluded that based on the facts an order of suspension was the appropriate penalty on this basis:

While the conduct of the Lawyer in this case was serious and requires significant punishment, the evidence before us does not compel a finding of a “scheme” or “pattern of conduct” as the Law Society urges. Similarly, while the Lawyer’s integrity with respect to the conduct at issue in the case before us is questionable, the evidence before us does not support a finding of a complete loss of integrity as the Law Society argued. We believe that in all of these circumstances a significant suspension is the most appropriate penalty.

[9] At paragraphs 36 to 44 the Appeal Panel outlined the reasons for rejecting those conclusions and at paragraph 45, the Appeal Panel summarized as follows:

Taken cumulatively, and discounting the few mitigating factors that were relied upon erroneously by the hearing panel, this was a case with the following features: many serious findings of misconduct over a lengthy duration, featuring an absence of integrity, honesty and candidness on the part of the Licensee, with minimal mitigating circumstances and multiple aggravating considerations. There was no basis to depart from the presumptive penalty as set out in Bolton and subsequent decisions of this Tribunal, as well as the recent Divisional Court decision in Bishop v. Law Society of Upper Canada, 2014 ONSC 5057, at paragraphs 26-31. In the circumstances, the totality of the Respondent’s misconduct, properly considered, could only reasonably result in a revocation of her licence.

[10] As indicated at paragraph 61 of those reasons, based only on the findings of misconduct made by the Hearing Panel on particulars 1 to 6 and 10 the Appeal Panel allowed the penalty appeal and substituted an order revoking the appellant’s licence. I agree with counsel for the respondent that the reasoning is clear; that the Appeal Panel’s interpretation of the Hearing Panel’s reasons is reasonable; and that the Appeal Panel’s substitution of revocation for suspension is entitled to deference.

[11] After making that ruling, the Appeal Panel dealt with the decision of the Hearing Panel to dismiss the allegations in particular 7 (misleading the Law Society) and particular 8 (filing misleading MARs). The Appeal Panel reviewed the evidence and at paragraph 51 concluded that the Hearing Panel misapprehended and failed to take into account its own findings on particular 3 and it failed to resolve the credibility issue that it posed under particular 7. The Appeal Panel held that on the evidence properly understood, the Hearing Panel could only have found a violation of particular 7. With respect to particular 8, the Appeal Panel noted that it had been agreed that the appellant’s MARs were inaccurate. The Appeal Panel observed that the Hearing Panel rejected a finding of breach of the integrity rule but provided no reason for its conclusion. As indicated at paragraph 56, the Appeal Panel held that it was unreasonable, on the uncontradicted facts, to dismiss particular 8 and substituted a finding of a violation of particular 8. Counsel for the appellant raised this issue in his factum but made no submissions. I am satisfied that the reasoning of the Appeal Panel is clear and reasonable and is entitled to deference.

Conclusion

[12] The appeal is dismissed. The appellant shall pay costs to the respondent in the amount agreed, namely $12,000.

Kiteley J.

I agree _______________________________

Nordheimer J.

I agree _______________________________

D. Edwards J.

Date: June 28, 2017