CITATION: Marusic v. Law Society of Upper Canada, 2017 ONSC 663
DIVISIONAL COURT FILE NO.: 531/16
DATE: 20170216
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
DAMBROT, SWINTON and RAMSAY JJ.
BETWEEN:
MARIA MARUSIC Applicant
– and –
THE LAW SOCIETY OF UPPER CANADA AND THE LAW SOCIETY TRIBUNAL Respondents
Counsel: Brian H. Greenspan and Naomi M. Lutes, for the Applicant Louise A. Hurteau and Leslie Maunder, for the Respondent the Law Society of Upper Canada Lisa Mallia, for the Respondent the Law Society Tribunal
HEARD at Toronto: December 5, 2016
M. DAMBROT J.:
[1] Maria Marusic brings an application for judicial review of a decision of the Law Society Tribunal – Appeal Division dated October 31, 2016[^1] that overturned a decision of the Law Society Tribunal – Hearing Division dated April 8, 2016[^2] and ordered that the applicant be suspended on an interlocutory basis pending a potential conduct application by the respondent Law Society of Upper Canada (the "Law Society"). The applicant requests that the order of the Appeal Division be quashed and the decision of the Hearing Division be reinstated.
BACKGROUND:
Factual Background
[2] The applicant was called to the Ontario bar in 1993. Since then, she has been employed by, or a partner with, a series of law firms of which Claudio Martini was a partner. Between 2010 and the firm's dissolution in January 2015, the applicant and Martini were both partners at Shulgan Martini Marusic LLP ("SMM"). The applicant and Martini were also involved in a romantic relationship beginning around 2001.
[3] In 2008, the Law Society began investigating Martini in respect of professional misconduct relating to two clients that took place between 2002 and 2008. This investigation culminated in a finding, in October 2014, of serious misconduct against Martini. In December 2014, Martini further admitted to the Law Society that he had misappropriated $50,000 held in trust for another client, "Company B." This prompted the Law Society to begin an investigation into misappropriation of trust funds at SMM. This investigation soon revealed that on 12 occasions between November 2012 and December 2014 monies were withdrawn from settlement funds held in trust for Company B, contrary to unfulfilled trust conditions. Most of the withdrawn funds went to SMM as fees.
[4] By January 5, 2015, Martini was suspended on an interim basis. SMM dissolved that month. The applicant subsequently continued practising law under Marusic Law LLP, initially in the premises previously occupied by SMM and, beginning in July 2015, in premises in the building where Martini worked. The applicant took over most of Martini's files.
[5] The applicant and Martini ended their romantic relationship in March 2015 but resumed it in August 2015.
The Law Society's Interlocutory Suspension Motion
[6] On March 11, 2015, the Law Society brought a motion pursuant to s. 49.27 of the Law Society Act, R.S.O. 1990, c. L.8, seeking an interlocutory suspension of the applicant's licence. For the purposes of the motion, the Law Society relied on the fact that in late 2012 and early 2013 the applicant had co-signed with Martini three cheques that transferred $1,264,108.87 in total from trust funds held for Company B to SMM's general account when the conditions for release of those funds had not been met. The applicant did not dispute that she had signed the cheques but testified that she had assumed the trust conditions had been met. The Law Society alleged that this assertion was implausible for a number of reasons, including the applicant's involvement in the settlement of the Company B matter.
[7] In a decision dated May 6, 2015, a panel of the Law Society Tribunal's Hearing Division (the "First Hearing Panel") concluded that there was "compelling and credible evidence that provides a reasonable basis for believing that there exists a significant risk of harm to members of the public, or to the public interest in the administration of justice, if an interlocutory order is not made" – a prerequisite for the panel to make an interlocutory order pursuant to s. 49.27 of the Law Society Act.
[8] In coming to this conclusion, the First Hearing Panel noted that the applicant's testimony that she believed that the settlement terms in relation to the Company B file had been satisfied "raise[d] some concerns," including because the applicant was aware of the serious disciplinary proceeding, involving allegations of deceit, with which Martini was dealing at that time and "the closeness of the personal and business relationship" between the applicant and Martini. Nonetheless, the First Hearing Panel concluded that the risk established by the Law Society could be adequately addressed by something less than the full interlocutory suspension sought by the Law Society, as the alleged misconduct related to only one aspect of the applicant's practice: the use of trust funds. After hearing further submissions, the First Hearing Panel made an order on June 1, 2015 requiring that a custodian be put in place over the applicant's trust accounts.
The Law Society's Motion to Vary the Interlocutory Order
[9] In December 2015, the Law Society brought a motion before a different panel of the Hearing Division (the "Hearing Panel") to vary the June 1, 2015 interlocutory order, seeking to replace the interlocutory licence restrictions imposed by that order with a full suspension of the applicant's licence based on evidence of a material change in circumstances. In particular, the Law Society alleged that the applicant had associated with and/or facilitated the practise of law by Martini, whose licence was suspended.
[10] This allegation related to the file of "Client X." Martini had represented Client X from about 2010 until Martini's licence was suspended, at which time the applicant took over the file. In January 2015, another lawyer, Gino Morga, was brought in to assist the applicant with the file, though the nature of Morga's retainer with Client X is in dispute. The applicant, Martini, and Morga met with Client X on several occasions between January and May 2015. Martini was also present in Ottawa on the first day of Client X's trial in May 2015, although he was not in the courtroom. The applicant, Martini, and Morga returned to Ottawa for a mid-trial settlement conference in July 2015. On July 14, 2015 – following a settlement meeting attended by Client X, the applicant, and Morga – the applicant met with Martini and Client X and Martini handwrote an authorization authorizing the applicant to settle the action for a particular amount and specifying the fees, disbursements, and HST (totaling 54 percent of the settlement amount) that Marusic Law would receive. There was no pre-existing signed contingency fee agreement between Client X and the applicant, and Client X subsequently disputed the fee agreement concluded in Ottawa.
[11] The Law Society was of the view that these events raised a new concern regarding the applicant – that she had facilitated Martini's practise of law while suspended – that was not addressed by the June 1, 2015 interlocutory order and that indicated the existence of a significant risk to the public and public confidence in the administration of justice. The applicant submitted that Martini's presence during meetings with Client X was necessary in order to transition the file and that his role with respect to the authorization signed on July 14, 2015 was merely to record the discussion.
[12] The Hearing Panel concluded that there had been a material change in circumstances since the initial interlocutory order: the applicant had resumed her romantic relationship with Martini. However, matters relating to the transition and resolution of Client X's matter were completed by July 2015, and the romantic relationship did not resume until the following month. The majority of the Hearing Panel was therefore not satisfied that the applicant presented a significant risk to the public that could not be addressed by the existing practice restriction and the addition of a further restriction: that Martini not be allowed to be in the office of Marusic Law.
[13] A dissenting member of the Hearing Panel would have granted the Law Society's motion for a full suspension, on the basis that the applicant's response to the Law Society's allegations was not credible. The member had concerns regarding several aspects of the applicant's testimony, including her account of Martini's involvement in the Client X file.
The Law Society's Appeal to the Appeal Division
[14] The Law Society appealed the dismissal of its motion to vary to a panel of the Appeal Division (the "Appeal Panel") on a number of grounds. Before the Appeal Panel, the parties agreed that the standard of review of the Hearing Panel's decision was reasonableness on questions of fact and mixed fact and law and correctness on questions of law.
[15] In its decision dated October 31, 2016, the Appeal Panel concluded that the majority of the Hearing Panel erred in law when it "misapprehended important evidence or failed to take it into account at all." According to the Appeal Panel, the Hearing Panel majority significantly understated the importance that the First Hearing Panel had placed on the applicant's evidence that she and Martini had parted and understated the impact of the resumption of the relationship on the applicant's credibility and judgment. Furthermore, the Hearing Panel majority misapprehended the significance of the undisputed evidence of Martini's involvement in negotiating a large fee with his former client and apparently took the applicant's questionable explanation for Martini's involvement at face value. The Appeal Panel concluded that if the First Hearing Panel had been aware of the new evidence, it would have imposed an interlocutory suspension. The Appeal Panel therefore imposed a suspension. However, given the early stage of the Law Society's investigation and the fact that the Law Society could not estimate when the investigation would be completed, the Appeal Panel indicated that the applicant should be entitled, by motion, to require the Law Society to show that the interlocutory suspension should continue after it had been in place for five months.
ISSUES:
[16] The applicant submits that the Appeal Panel's order and decision should be quashed on the basis that the Appeal Panel erred by:
- Applying the wrong standard of review to the Hearing Panel majority's findings of fact and credibility;
- Applying the wrong standard of review in assessing the adequacy of the Hearing Panel's reasons;
- Placing undue and unreasonable reliance on the nature of the applicant's relationship with Martini; and
- Applying the wrong standard of review to the decision of the Hearing Panel and unreasonably substituting its decision for that of the Hearing Panel majority.
[17] The applicant also argues that the Appeal Panel's decision is unreasonable having regard to the absence of risk to the public interest and the stage of the investigation.
STANDARD OF REVIEW IN THE DIVISIONAL COURT:
[18] This Court ordinarily reviews decisions of the Law Society Tribunal's Appeal Division by way of appeal. Section 49.38 of the Law Society Act provides that a party to a proceeding before the Appeal Division may appeal to the Divisional Court from a final decision or order of the Appeal Division if the Appeal Division's final decision or order was made on an appeal from a decision or order of the Hearing Division. However, in this case, the matter is properly before us as an application for judicial review because the decision of the Appeal Panel is not a final decision. No appeal is available.
[19] The applicant submits that the standard of review on an application for judicial review of a decision of the Appeal Division is the same as the standard of review on an appeal from the Appeal Division: questions of fact and mixed fact and law are reviewable on a reasonableness standard and "cannot be reversed absent a palpable and overriding error" while "questions of law and principle are reviewable on a standard of correctness."
[20] While we agree that the standard of review on this judicial review application should not differ from the standard of review on an appeal from the Appeal Division, we do not agree with the applicant's formulation of that standard of review. Her formulation both conflates the standard of review for questions of fact on judicial review (ordinarily, reasonableness: Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, at paras. 51, 53) with the standard of review for questions of fact on judicial appeals (palpable and overriding error: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 10) and misapprehends the standard of review for questions of law on appeals from the Appeal Division.
[21] The standard of review applicable to decisions of the Appeal Division was correctly identified by this Court in Igbinosun v. Law Society of Upper Canada (2008), 2008 36158 (ON SCDC), 239 O.A.C. 178, 83 Admin L.R. (4th) 106 (Div. Ct.), at para. 9, aff'd 2009 ONCA 484, 96 O.R. (3d) 138.
[22] The Appeal Panel is entitled to deference on its findings of mixed fact and law, determination of penalty and its interpretation of the Law Society Act and this Court should only intervene if the Appeal Panel's decision is unreasonable. This Court has repeatedly applied this standard of review to decisions of the Appeal Division, as did the Court of Appeal in Groia v. Law Society of Upper Canada, 2016 ONCA 471, 131 O.R. (3d) 1. In addition, the Court in Groia clarified, at para. 78, that the standard of reasonableness applies to the Appeal Division's interpretation of its home statute and the Conduct Rules, including what behaviour constitutes professional misconduct and the test to be applied in that inquiry. To the extent that the decision of this Court in Payne v. Law Society of Upper Canada, 2014 ONSC 1083, 319 O.A.C. 176 (Div. Ct.), which was relied on by the applicant, may suggest that a different standard of review is applicable, it was wrongly decided.
[23] As a result, there can be no doubt that the standard of reasonableness applies to all questions raised on this judicial review application.
ANALYSIS:
[24] Before turning to the grounds of review raised by the applicant, it is worth identifying the authority for the Hearing Division to make an interlocutory order suspending a lawyer's licence or placing restrictions on a lawyer's practice. Section 49.27 of the Law Society Act provides:
(1) The Hearing Division may make an interlocutory order authorized by the rules of practice and procedure, subject to subsection (2).
(2) The Hearing Division shall not make an interlocutory order suspending a licensee's licence or restricting the manner in which a licensee may practise law or provide legal services, unless there are reasonable grounds for believing that there is a significant risk of harm to members of the public, or to the public interest in the administration of justice, if the order is not made and that making the order is likely to reduce the risk.
Did the Appeal Panel apply the wrong standard of review to the Hearing Panel majority's findings of fact and credibility?
[25] The Appeal Division has consistently held that the standard of review on appeals from the Hearing Division to the Appeal Division on questions of law is correctness and on questions of fact and mixed fact and law is reasonableness. See, for example, Law Society of Upper Canada v. Melnick, 2013 ONLSAP 27, [2013] L.S.D.D. No. 210, at para. 10. Similarly, in Igbinosun, at para. 9, as in a number of subsequent cases, this Court held:
[T]he Appeal Panel is required to accord deference to decisions of the Hearing Panel on questions of fact and questions of mixed fact and law. The Appeal Panel is only entitled to intervene if the decision of the Hearing Panel is unreasonable or incorrect in law.
[26] Before the Appeal Panel, the parties agreed that this was the applicable standard of review, and the Appeal Panel adopted it. However the applicant argues before us that the Appeal Panel paid only lip service to this standard of review, but that, in reality, it retried the motion for an interlocutory suspension, improperly substituting its own findings of fact for those of the majority of the Hearing Panel, thereby erring in law. I do not agree.
[27] The Appeal Panel overturned the decision of the Hearing Panel on the basis that the Hearing Panel misapprehended important evidence or failed to take it into account. The applicant conceded, in her factum, that "a material misapprehension may constitute an error of law" (see, for example, Shooters Sports Bar v. Ontario (Alcohol and Gaming Commission) (2008), 238 O.A.C. 9, 2008 25052 (Div. Ct.), at para. 38, and Opara v. Law Society of Upper Canada, 2015 ONSC 3348, [2015] O.J. No. 5724 (Div. Ct.), at para. 20). However, the applicant argues that in this case, the Appeal Panel did not identify a material misapprehension of evidence, but instead retried the motion, failed to accord deference to the Hearing Panel's findings of fact and credibility, and improperly substituted its own findings of fact for those of the Hearing Panel.
[28] I do not agree. I agree with the respondent that by its nature, an allegation that a hearing panel misapprehended evidence will require an appeal panel to engage with the evidence and the factual conclusions reached in the first instance. The Appeal Panel here did not substitute its view of the facts for the view of the majority of the Hearing Panel. It simply performed the analysis necessary to determine whether there had been a misapprehension of the evidence amounting to an error of law.
[29] A central aspect of the applicant's argument on this issue relates to credibility. The applicant says, relying on Law Society of Upper Canada v. Baksh, 2006 ONLSAP 6, [2006] L.S.D.D. No. 35, that an appeal panel is not well-situated to simply substitute its own assessment of credibility for that of a hearing panel, and is not permitted to do so. I do not disagree with this statement, but it does not describe what the Appeal Panel did in this case. Here the Appeal Panel concluded that the Hearing Panel erred in law by accepting at face value the applicant's explanation for her conduct. In other words, it erred in law in accepting her evidence without scrutiny – without engaging in any evaluation whatsoever of the applicant's explanation. In reaching this conclusion, the Appeal Panel relied on the decision of the Appeal Division in Law Society of Upper Canada v. Baksh, 2010 ONLSAP 18, [2010] L.S.D.D. No. 107, at paras. 47-48:
[47] It is true that the issue pursuant to s. 49.27 of the [Law Society Act] is not whether the licensee has committed professional misconduct, or, expressed another way, whether the allegations being investigated by the Society, if proceeded with, will be established to the requisite degree of proof: Law Society of Upper Canada v. Karalis, [2009] L.S.D.D. No. 102. That determination is left to a hearing panel constituted to hear the merits of any conduct application. However, that is not to say that the credibility or quality of a licensee's response to such allegations is immune from any scrutiny whatsoever at a s. 49.27 hearing. A hearing panel should consider whether the licensee's explanation, if any, heightens, reduces or alleviates any concerns raised by the evidence tendered by the Society. That consideration is relevant not only to whether a significant risk finding should be made, but to the nature of the interlocutory order that should follow such a finding, if made.
[48] In our respectful view, the hearing panel engaged in no evaluation whatsoever of the respondent's explanations, and thereby erred in law. It simply accepted those explanations at face value. Those explanations raised as many problems as they purportedly addressed. They did not alleviate the serious concerns raised by the evidence presented on behalf of the Society.
[30] The Appeal Panel did not err in adopting this statement of the law, and, as a result, in concluding that by simply accepting the applicant's explanation for her conduct at face value, the Hearing Panel did not fulfil its statutory responsibility. The Hearing Panel ought to have scrutinized the explanation to determine whether it heightened, reduced or alleviated the concerns raised by the Law Society's evidence. Since the Hearing Panel did not scrutinize the explanation, the Appeal Panel performed that task, as it was entitled to do. It made no finding of credibility. It determined that there were reasonable grounds for believing that there was a significant risk of harm if the order was not made. As is apparent, I am not persuaded that the Appeal Panel made any error in the manner in which it approached this issue.
[31] A final note. The Appeal Panel, and the parties, approached the issue of misapprehension of evidence on the basis that for the Appeal Panel to interfere with the Hearing Panel's decision, there had to be a material misapprehension of evidence amounting to an error of law. However as Doherty J.A. pointed out in R. v. Morrissey (1995), 1995 3498 (ON CA), 22 O.R. (3d) 514, 97 C.C.C. (3d) 193 (C.A.), at p. 538, "[t]he jurisprudence from the Supreme Court of Canada demonstrates the difficulty in distinguishing between misapprehensions of the evidence which constitute an error of law alone and those which do not." He went on to say that "[t]he recent trend in that court suggests that most errors which fall under the rubric of a misapprehension of evidence will not be regarded as involving a question of law." Doherty J.A. noted that where a right of appeal is restricted to appeals based on errors of law, "characterizing the nature of the error arising out of the misapprehension of evidence becomes crucial." No such concern arises here. An appeal by the Law Society to the Appeal Division is available on questions of mixed fact and law. If there was a material misapprehension of evidence by the Hearing Panel that impacted in a material way on the reasoning process of the Hearing Panel and its ultimate disposition, even if it did not rise to an error of law, it would have rendered the decision unreasonable and the Appeal Panel would have been entitled to intervene.
[32] In any event, I am of the view that in this case, the Appeal Panel correctly determined that the Hearing Panel's misapprehension of the evidence amounted to an error of law and reasonably concluded that a suspension was necessary. I would not give effect to this ground of review.
Did the Appeal Panel apply the wrong standard of review in assessing the adequacy of the Hearing Panel's reasons?
[33] The applicant argues that the Appeal Panel applied the wrong standard of review in assessing the sufficiency of the reasons of the Hearing Panel. She reminds us that insufficiency of reasons is not a stand-alone ground for quashing a decision and that the reasons of an administrative tribunal must be read together with the outcome and serve the purpose of showing whether or not the result was a reasonable one: Newfoundland and Labrador Nurses' Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC 62, [2011] 3 S.C.R. 708.
[34] The short answer to this argument is simply that the Appeal Panel did not allow the appeal on the basis that the Hearing Panel's reasons were insufficient. It allowed the appeal on the basis of errors of law. The Appeal Panel reached this conclusion because, in its view, the Hearing Panel misapprehended important evidence or failed to take it into account at all; the new evidence before the Hearing Panel undermined the basis upon which the First Hearing Panel declined to suspend the applicant; the applicant's evidence did not alleviate or even address the serious concerns raised by the new evidence, but instead increased them; and the additional term imposed by the Hearing Panel in no way reduced the risk to the public and public confidence in the legal profession. After identifying the error of law made by the Hearing Panel, the Appeal Panel allowed the appeal on the basis of that error – not on the basis of any insufficiency of reasons – and substituted the decision it concluded was appropriate. Any comment the Appeal Panel made about the shortcomings of the reasons was properly made in the context of assessing whether or not the Hearing Panel had misapprehended the evidence.
[35] I would not give effect to this ground of review.
Did the Appeal Panel place undue and unreasonable reliance on the nature of the applicant's relationship with Martini?
[36] The First Hearing Panel, in deciding not to suspend the applicant, viewed as important the evidence of the applicant that she and Martini had ended their relationship. The Hearing Panel accepted that the resumption of an intimate relationship between the applicant and Martini was a material change in circumstance.
[37] In the course of reviewing the Hearing Panel's reasons, the Appeal Panel said that the Hearing Panel understated the significance of the termination of the applicant and Martini's relationship to the First Hearing Panel's decision. Specifically, the Hearing Panel failed to recognize that the termination of the relationship, in a context where the applicant characterized herself as a victim of Martini's deceit, was a significant factor in the First Hearing Panel's assessment of the risk to the public and the restoration of public confidence in the profession. The Hearing Panel also failed to recognize that the resumption of the relationship had an impact on the applicant's credibility and judgment.
[38] The applicant argues that this position:
… reflects the antiquated and unfair view that the Applicant is unable to separate the personal from the professional, and that she is instead controlled, even professionally, by her romantic partner. Lawyers, like any person, are capable of forgiving a romantic partner for dishonesty, even betrayal. The choice to resume a romantic relationship is not a matter of professional judgment and should not be treated as such. The Law Society governs its members in their own conduct – not the conduct of their partners, and it has no jurisdiction to opine on a purely personal relationship in which the Applicant was involved.
[39] This argument is misconceived. The issue at hand does not concern a "purely personal relationship in which the Applicant was involved," and the decision of the Appeal Panel does not even remotely represent an intrusion into the purely personal relationship of a member.
[40] It is worth remembering that it was the applicant who first made her personal relationship with Martini an issue in this case. The Law Society's case against the applicant at the hearing of the Law Society's motion for an interlocutory suspension involved the presentation of reasonable grounds to believe that the applicant was directly involved in the misuse of trust funds in her law firm, along with her partner Martini. By way of explanation for her conduct, the applicant testified that she had been in a romantic relationship with Martini, and that, like many others, she was a victim of his deceitful ways. However, she said, her personal relationship with Martini had ended. She argued that all of the misconduct alleged against her "derives from the conduct of Mr. Martini, who is now suspended, and with whom she no longer maintains a relationship."
[41] After hearing all of the evidence, the First Hearing Panel concluded that applicant's business and personal lives were intertwined with those of Martini to a considerable extent, and that it was hard to disentangle Martini's footprints from those of the applicant. They worked closely together on the Company B matter. They shared a common source of income and liability for debts. They kept their personal relationship a secret from their third partner. Martini played a key role in all of the allegations against the applicant. These considerations contributed to the First Hearing Panel's conclusion that there was a risk of harm to the public confidence in the profession if the applicant were to be permitted to continue to practise without restriction. Given that the evidence raised significant questions about the applicant's integrity in relation to her use of trust funds, an order suspending her or restricting her practice was required to maintain public confidence in the profession. Ultimately, the First Hearing Panel determined that restrictions were sufficient for this purpose.
[42] Reading its reasons as a whole, it is apparent that the applicant's testimony that she was a victim of Martini's deceitful ways, but had ended her personal relationship with him, was a factor in the First Hearing Panel's disposition.
[43] It is in this context that the applicant's resumption of her intimate relationship with Martini became central to the appeal. It undermined her credibility and increased the risk that she could again either be manipulated by Martini or become his partner in fraudulent conduct, particularly in light of his involvement in the settlement of Client X's litigation. The Appeal Panel's concerns do not reflect an antiquated or unfair view of the applicant. On the contrary, they are a logical and appropriate response to the evidence led and positions taken in this proceeding, and particularly the evidence and position of the applicant.
[44] I would not give effect to this ground of review.
Did the Appeal Panel apply the wrong standard of review to the decision of the Hearing Panel and unreasonably substitute its decision for that of the Hearing Panel majority?
[45] On this ground of review, the applicant argues that the Appeal Panel failed to analyze whether the ultimate conclusion of the Hearing Panel was reasonable. This position ignores the fact that the appeal to the Appeal Panel was allowed on the basis of an error of law. If the Appeal Panel, after concluding that an error of law was made by the Hearing Panel, were permitted to allow an appeal only if it concluded that the ultimate result was unreasonable, there would be little point in permitting appeals to be reviewed on the basis of errors of law. Logic and the Law Society Act lead me to a different view.
[46] Subsection 49.32(1) of the Act provides:
A party to a proceeding before the Hearing Division may appeal a final decision or order of the Hearing Division to the Appeal Division.
[47] Subsections 49.33(1) and (2) of the Act provide:
(1) A party other than the Society may appeal under section 49.32 on any grounds.
(2) The Society may appeal under section 49.32 only on a question that is not a question of fact alone, unless the appeal is from an order under section 49.28 [regarding costs], in which case the Society may appeal on any grounds.
[48] Subsection 49.35(2) of the Act provides:
After holding a hearing on an appeal, the Appeal Division may,
(a) make any order or decision that ought to or could have been made by the Hearing Division or person who made the order or decision appealed from;
(b) order a new hearing before the Hearing Division, in the case of an appeal from a decision or order of the Hearing Division; or
(c) dismiss the appeal.
[49] This is consistent with other appellate schemes. Once an appellate tribunal concludes that an error of law has been made, unless the error is harmless, the tribunal is free to either order a new hearing, or make the order that it concludes ought or could have been made where that is feasible. There is no logical or statutory reason for the Appeal Panel, after finding that an error of law was made that is not harmless, to engage in a consideration of the reasonableness of the Hearing Panel's decision before substituting the order that it concludes ought to have been made.
[50] In any event, it is implicit in the reasons of the Appeal Panel that it considered the decision of the Hearing Panel to be unreasonable. Such a conclusion flows inevitably from the Appeal Panel's findings, including that: there was a misapprehension of evidence by the Hearing Panel that impacted in a material way on its reasoning process and its ultimate disposition; the Hearing Panel fundamentally misapprehended the significance of undisputed evidence concerning Martini's involvement in negotiating a large fee with his former client; and the applicant's evidence does not alleviate the serious concerns raised by the new evidence tendered by the Law Society.
Was the Appeal Panel's decision unreasonable having regard to the risk to the public interest and the stage of the investigation?
[51] The applicant argued that the Appeal Panel's decision was also unreasonable because the risk to the public interest did not warrant a full suspension and because the stage of the investigation rendered a full suspension unreasonable.
[52] With respect to the first point, it is beyond dispute that the determination of whether or not the risk to the public interest in a particular case warrants a full suspension is an issue that falls squarely within the expertise of the Law Society Tribunal, and that the Tribunal's determination of risk is owed deference by this Court. The applicant is really asking us to substitute our view of the extent of the risk for the view of the Appeal Panel. We are obliged by the law to decline this invitation and we do so. There is nothing unreasonable about the Appeal Panel's conclusion on this issue.
[53] With respect to the second point, the applicant argues that in light of the stage of the investigation, a full interlocutory suspension was unreasonable. The investigation has continued for two years, and, the applicant says, there is no end in sight.
[54] The Appeal Panel was alive to this concern. It recognized that the length of the investigation was relevant to whether an interlocutory suspension or restrictions should be imposed. However it found that the Law Society had met the test for an interlocutory suspension and that the length of the investigation did not alter that conclusion. The Appeal Panel nevertheless went on to address the concern about the length of the investigation by crafting terms that encourage the prompt investigation of the applicant's conduct and better assure that during the course of the suspension, the suspension continues to be in the interests of justice. The Appeal Panel ordered that the applicant would be entitled, by motion, to require the Law Society to show that the interlocutory suspension should continue after it has been in place for five months.
[55] The applicant acknowledges that the Appeal Panel recognized and affirmed the relevance of the stage of the investigation, but she argues that it failed to give this consideration proper effect, rendering its order unreasonable. Once again, the applicant is inviting us to substitute our own view of the proper balance of the public interest and fairness to the applicant for that of the Appeal Panel. Again, I decline the invitation and defer to the judgment of the Appeal Panel. Its treatment of this issue was entirely reasonable.
[56] I would not give effect to this ground of review.
DISPOSITION:
[57] For these reasons, the application for judicial review is dismissed and the decision of the Appeal Panel is affirmed. The interlocutory suspension order was stayed by order of this Court pending the decision of the Court. For greater certainty, the suspension order and the five-month period after which the applicant may, by motion, require the Law Society to show that the interlocutory suspension should continue, will continue to run from the date of the release of this judgment, unless otherwise agreed upon by the parties.
[58] On the agreement of the parties, costs are awarded to the Law Society in the amount of $4,000, all-inclusive.
Dambrot J.
I agree.
Swinton J.
I agree.
Ramsay J.
Released: February 16, 2017
CITATION: Marusic v. Law Society of Upper Canada, 2017 ONSC 663
DIVISIONAL COURT FILE NO.: 531/16
DATE: 20170216
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
DAMBROT, SWINTON and RAMSAY JJ.
BETWEEN:
MARIA MARUSIC Applicant
– and –
THE LAW SOCIETY OF UPPER CANADA AND THE LAW SOCIETY TRIBUNAL Respondents
REASONS FOR JUDGMENT
M. DAMBROT J.
RELEASED: February 16, 2017
[^1]: Law Society of Upper Canada v. Marusic, 2016 ONLSTA 22.
[^2]: Law Society of Upper Canada v. Marusic, 2016 ONLSTH 67.