Chin v. The Law Society of Upper Canada, 2018 ONSC 2072
CITATION: Chin v. The Law Society of Upper Canada, 2018 ONSC 2072
DIVISIONAL COURT FILE NO.: 516/17
DATE: 20180329
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
P. SMITH J., THORBURN J. and MATHESON J.
BETWEEN:
REBECCA CHIN
Appellant
– and –
THE LAW SOCIETY OF UPPER CANADA
Respondent
COUNSEL:
Patricia Virc and Michael Title, for the Appellant
Leslie Maunder, for the Respondent
HEARD at Toronto: March 27, 2018
REASONS FOR DECISION
THORBURN J.
OVERVIEW
[1] The Appellant, Rebecca Chin was a lawyer who performed residential real estate transactions. She was called to the Bar in 2007.
[2] On May 15, 2015, the Hearing Division of the Respondent Law Society of Upper Canada (the “Law Society”) found that the Appellant knowingly participated in mortgage fraud in respect of six residential real estate transactions. Her licence to practice law was revoked. The Hearing Tribunal found that maintaining public confidence was the primary consideration of the Law Society and that a consistent message must be sent that the Law Society refuses to tolerate fraudulent conduct.
[3] The decision of the Hearing Division was rendered by only two of the three members who heard the matter as the third was appointed to the Bench. One of the two members who participated in the decision was a lay member.
[4] The Appellant appealed the decision to the Law Society Tribunal – Appeal Division. The Appeal Division upheld the decision of the Hearing Division.
[5] In her Appeal material, the Appellant claims the Hearing Division had no jurisdiction to render a decision on behalf of only two of the three members of the Panel.
[6] Secondly, she contests the admissibility and use of the expert report that provides general expert opinion evidence as to “red flags” in respect of possible fraudulent activity. The report was filed on consent before the Hearing Division. She also suggests undue reliance was placed on the report.
[7] Thirdly, she appeals the finding that she “knowingly assisted in dishonest or fraudulent conduct” and the penalty of revocation of her licence to practice law. The Appellant claims that the Hearing Division failed to consider the intention to participate in fraud separately in respect of each of the six transactions and as such, the determination on the merits was unreasonable.
JURISDICTION OF THE DIVISIONAL COURT
[8] Section 49.38 of the Act creates a statutory right of appeal to the Divisional Court. That provision applies to any case where the Law Society charges one of its members with professional misconduct under s. 34 of the Act.
[9] The Appellant has the right to appeal on any question of fact or law. (Section 49.39 of the Act.)
STANDARD OF REVIEW TO BE APPLIED BY THE DIVISIONAL COURT
[10] The standard of review to be applied by the Divisional Court to decisions from the Law Society Appeal Panel was canvassed by the Divisional Court in Igbinosun v. Law Society of Upper Canada (2008), 2008 36158 (ON SCDC), 239 O.A.C. 178 (Div. Ct.), aff’d 2009 ONCA 484, 96 O.R. (3d) 138, at para. 9:
The Appeal Panel is entitled to deference on its findings of mixed fact and law, determination of penalty and its interpretation of the Act and this Court should only intervene if the Appeal Panel’s decision is unreasonable. However, on questions of law outside that area of expertise, the Appeal Panel is required to be correct.
Similarly, the 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. The standard of review to be applied by the Appeal Panel in its consideration of the Hearing Panel decision is a question of law and is required to be correct: The Law Society of Upper Canada v. Neinstein at paras. 43-44.
[11] Similarly, in Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, at paras. 47 to 53, the Court held that,
…Where the question is one of fact, discretion or policy, deference will usually apply automatically (Mossop, at pp. 599-600; Dr. Q, at para. 29; Suresh, at paras. 29-30). We believe that the same standard must apply to the review of questions where the legal and factual issues are intertwined with and cannot be readily separated.
(See also Groia v. LSUC, 2016 ONCA 471 at 54-62, 131 O.R. (3d) 1.)
[12] The standard of review in this case is reasonableness.
ISSUES TO BE ADDRESSED ON THIS APPEAL
[13] In her factum, the Appellant outlines three issues:
i. Did the Hearing Panel have jurisdiction to render a decision with two members (after the third person was appointed to the Bench);
ii. Should the Appellant be entitled to contest the admissibility of the expert report (filed on consent at the Hearing Tribunal and not contested before the Appeal Division). If so, was there undue reliance on the report? and
iii. Was the Hearing Tribunal’s decision that the Appellant was guilty of deliberate misconduct such that her licence should be revoked, unreasonable?
[14] At the hearing of this Appeal, the Appellant conceded that the expert report was properly admitted and that, where there is knowing participation in fraudulent activity, revocation of a licence is the appropriate remedy absent special circumstances.
EVIDENCE RELEVANT TO THIS APPEAL
The Appellant’s Experience
[15] The Appellant was called to the bar in Hong Kong in 2000 and in Ontario in 2007. For three years prior to her call to the bar in Ontario, she worked at the law office of Oscar Wong, a lawyer with over 33 years of experience. There she received training in real estate practice from Jennifer Li, a real estate law clerk at Mr. Wong’s office.
[16] The Appellant left Mr. Wong’s office prior to her call to the Bar, but continued her relationship with Ms. Li. Upon her call to the Bar in 2007, she opened her own real estate practice. In her first year of practice she completed between 300 and 400 transactions.
The Six Transactions in Issue
Transaction #1: Olive Ave
[17] The Appellant was retained to act for the purchaser and the lender on a transaction that closed December 17, 2007. The purchase price was $248,000. TD Canada Trust advanced $186,000 in mortgage funds. The Appellant was required to report any recent price escalation and/ or disbursements to parties other than the usual payees to the lender, TD Bank (“TD”).
[18] The vendor, represented by Oscar Wong, had purchased the property only three days earlier, on December 14, 2007, for $110,000. The Appellant distributed the mortgage advance as instructed by the vendor, almost entirely to third parties including counsel to the vendor. The Appellant did not report any of this to TD, as she was instructed to do.
[19] Ten days after the closing, TD wrote to the Appellant and asked why she had not notified them of the flip.
[20] The Appellant responded in writing that she had been aware of the flip, as had her purchaser client, but did not think it suspicious or necessary to report. (The Appellant’s file contained many pre-closing documents and letters signed by the Appellant referencing the fact of the flip.)
[21] The Appellant also signed the trust cheques including the cheque for funds payable to the original vendor.
[22] During her sworn interview with the Law Society investigator, the Appellant had a second and different explanation than the one she had given the TD. She stated that:
a. She was not aware of the flip until TD wrote to her;
b. Jennifer Li, not she, prepared all the paper work;
c. Upon receiving TD's letter, the Appellant met with Jennifer Li and they agreed Jennifer Li would "fix" the problem by creating, backdating and inserting documents referencing the flip that had not originally been part of the file; and
d. She met with her purchaser client for the first time after she received the TD letter. Her client signed an Authorization and Direction confirming that he was aware of the flip and was content to proceed with the purchase nonetheless. The Authorization and Direction were not dated and were worded as if they had been signed prior to the transaction closing.
[23] At the hearing, the Appellant maintained that she had no knowledge of the flip prior to receiving the letter from the TD bank, but gave a third version of events:
a. The letters she signed which referenced the flip were not back dated. She signed them on the dates indicated;
b. The letters were created by Jennifer Li and the Appellant had not read them because she trusted Jennifer Li to handle the file without oversight;
c. She never discussed or agreed with Jennifer Li to alter the file. She was speculating when speaking to the Law Society investigator and, under pressure, lied to her.
[24] In January, 2008, after TD received the Appellant's (original) explanation for not alerting them to the flip, they advised her that they would no longer permit her to act for them on mortgages. The Appellant asked to be reinstated and told the bank she would have no future "business dealings" with Wong. The bank agreed to reinstate the Appellant.
[25] Thereafter, the Appellant closed two deals with Wong. She explained that by business dealings she meant referrals, not transactions where she acted for the other party to the agreement.
Transaction #2: Huntsmill Blvd
[26] The Appellant acted for both the purchaser and the lender. The purchase price was $440,000 and the Bank of Montreal advanced $352,000 in mortgage funds. The Bank's instructions included a requirement that the Appellant confirm there was no secondary financing and/ or disbursements to parties other than the usual payees.
[27] The file was referred to the Appellant by Mei Li, a mortgage broker.
[28] In advance of closing, the Appellant sought confirmation from the vendor's lawyer that he would provide a redirection to pay $77,653.69 of the purchase funds to Mei Li. The vendor's lawyer provided the direction. Later the same day, Mei Li brought the Appellant a bank draft for $75,653.69, which was the amount required from the purchaser to close the transaction. The next day, the Appellant wrote a cheque to Mei Li for $77,653.69 as directed.
[29] The Appellant admitted that she sent the letter to the vendor's lawyer seeking the redirection after Mei Li told her that the deal would not close unless the direction was received. When pressed in cross-examination she could not say why Mei Li would know whether the deal would close. The Appellant explained that Mei Li told her she had lent the vendor some money for renovations. The Appellant asked the vendor's lawyer for everything in writing to assure her that the third party payment was legitimate but probed the matter no further and did not tell her lender client.
Transaction #3: Leslie Street
[30] The Appellant acted for both the purchaser and the lender. The file was referred to her by Davin Lok, a mortgage broker. Oscar Wong, assisted by Jennifer Li, acted for the vendor.
[31] The purchase price was $334,000 and Computershare Trust advanced $316,344.35 in mortgage funds. Computershare’s instructions included a condition that the "proceeds of this mortgage are ... not for the benefit of any third party."
[32] The purchaser provided $21,300 to the Appellant to close the transaction. After discharging the existing mortgages, the Appellant disbursed the extra purchase funds as directed by Wong: $27,200 to Davin Lok and $4,824.93 to the vendor.
[33] The Appellant stated that Lok told her the $27,200 payment was for renovation funds he had loaned to the vendor. The Appellant did not advise her lender client that the majority of the sale proceeds were being directed to a third party.
Transaction #4: Braymore Blvd
[34] The Appellant acted for the purchaser and the lender. The purchase price was $310,000 and the Bank of Montreal advanced $278,464 in mortgage funds. The file was referred to the Appellant by mortgage broker Mei Li.
[35] The Appellant was aware when she received the file the day before closing that the purchaser and vendor were related to one another but did not tell her lender client this.
[36] The Agreement of Purchase and Sale reflected that originally the purchasers offered to pay $269,000 for the property with a $5,000 deposit. Amendments to the Agreement increased each of these figures by $41,000 so that the purchase price became $310,000 and the deposit amount $46,000 (payable directly to the vendor). The increased deposit amount was not initialed on the Agreement.
[37] The vendor's lawyer originally provided a Statement of Adjustments reflecting only a $5,000 deposit paid by the purchaser, but when the Appellant flipped it back stating the deposit should be $46,000, the vendor's lawyer amended the Statement of Adjustments and said he had confirmed the larger deposit with his client, the vendor.
[38] Because of the size of the deposit the purchaser was credited with, the mortgage advance was in excess of the funds due on closing. The purchaser received $11,500 from the mortgage advance as well as the cash back amount ($5,400) and was not required to pay anything to close the deal. The Appellant knew this but did not tell the lender.
Transaction #5: Oakwood Avenue
[39] The Appellant acted for the vendor in this transaction while Oscar Wong acted for the purchaser and the lender. The file was referred to the Appellant by Davin Lok.
[40] The Appellant received funds from Oscar Wong on closing and distributed $50,000 to Davin Lok and $20,000 to a business partner of Lok, pursuant to instructions from her client. The Appellant acknowledged that she was aware that third party payments were a red flag of fraud but was nonetheless unconcerned. Lok told her that the funds were repayment for loans made to the vendor for renovations. Rather than seek proof of the debts or the renovations, she provided template promissory notes that her client signed in her office (but left undated) in advance of the closing. This alleviated her concerns.
Transaction #6: North Talbot Road
[41] The Appellant acted for both the purchaser and the lender. The purchaser was the sister of one of the two vendors. Although the Appellant's file suggested that Royal Bank understood the purchase price to be $270,000, the purchase price on the Agreement of Purchase and Sale the Appellant originally received was $214,000. Royal Bank advanced $202,788 on condition that the lender clear a $92,000 private debt.
[42] The Appellant testified that she understood this was a refinancing. She explained that there was an Agreement of Purchase and Sale because at the same time as the property was being refinanced, title was transferring between the sisters because the couple on title to that point were holding the property in trust for the other sister.
[43] The Appellant had no documentation to support her "understanding" and in fact, was told by counsel for the vendor that there was no trust and this was a regular purchase and sale. The Appellant did not advise Royal Bank that this was not an arm's length transaction, or that it was a trust transfer simultaneously with a refinance. Nor did her file include proof that her purchaser client had fulfilled the condition by paying off the private debt.
[44] In advance of the transaction closing, the Appellant handwrote an amended purchase price on the Agreement of Purchase and Sale of $202,787.68: the same amount as the mortgage advance from Royal Bank. She did not alert the Royal Bank to the change.
THE HEARING TRIBUNAL DECISION
[45] The LSUC interviewed the Appellant in respect of the first transaction on January 24, 2013, five years after the transaction closed. The Appellant participated voluntarily.
[46] At the Hearing Division, the Appellant admitted she had a duty to supervise Ms. Li and did not.
[47] The Appellant did not admit that she committed fraud or that any party suffered a loss.
[48] The Hearing Division found that the file the Appellant provided to the Law Society in 2010 contained certain “fabricated” documents, in that they were created after closing and were back-dated or undated. The Hearing Tribunal also found that the Appellant had not disclosed the flip to her lender client as she was required to do.
[49] The Hearing Division found that the Appellant had actual knowledge on Transaction #1, was reckless on transactions #2, #3, #4 and #6 and either had actual knowledge of or was reckless with respect to fraud in transaction #5. In so finding, they considered the evidence adduced in respect of each of the six transactions, provided a detailed consideration of the evidence relevant to credibility, and concluded that the Appellant was not a credible witness.
[50] In reaching its conclusions as to the fraudulent nature of the transaction, and the Appellant’s appreciation of them, the Law Society considered and relied on the “generic” expert report of Reuben Rosenblatt and Bradley McLellan dated December 21, 2010 respecting “red flags” or warning signs indicative of possible dishonest or fraudulent conduct.
[51] The Hearing Division rejected the Appellant’s evidence that she did not know the transaction was a flip until afterward, and that she did not know she had signed a cheque payable to Ms. Li’s husband until afterward.
[52] The Hearing Division also rejected the Appellant’s claim that at the time of the first transaction she was “a newly–called sole practitioner” because “although she was only called to the Bar in 2007, she had worked for three years previously in the offices of Mr. Wong and Mr. Yeung doing real estate work”. They also rejected her claim that Transaction 1 closed uneventfully, and that she did not consider the file to be suspicious. The Hearing Division rejected the Appellant’s evidence that she did not recognize the “red flags,” remarking that her explanations “strain credibility.”
[53] The Hearing Division found that the Appellant intentionally failed to protect her lender clients and attempted to mislead the Law Society. The public interest was compromised because the Appellant was guilty of dishonesty, knowingly participated in fraud, and was a continuing danger to the public.
ANALYSIS AND CONCLUSION
THE FIRST ISSUE: Did the Hearing Tribunal err in deciding that it could render a Decision with only two members of the Panel?
[54] When the Law Society commences disciplinary proceedings against one of its members, the decision-maker of first instance is the Hearing Panel, which consists of three members appointed by Convocation of the Law Society, of which one must be a non-lawyer. (Section 49.21(2) of the Law Society Act, R.S.O. 1990, c. L-8.
[55] The Hearing Division Panel of three members was constituted and after all the evidence was heard, submissions made and the three-member hearing panel had reserved their decision, the Chair of the panel was appointed to the Superior Court of Justice. The Tribunal advised the parties of the appointment and advised that, in accordance with section 4.4(1) of the Statutory Powers Procedure Act R.S.O. 1990, Ch. S.22 (“SPPA”):
If a member of a tribunal who has participated in a hearing becomes unable, for any reason, to complete the hearing or to participate in the decision, the remaining member or members may complete the hearing and give a decision.
[56] The parties were invited to contact the Hearing Division to arrange a teleconference if they had any concerns. After some discussion, the Appellant advised that she was content to proceed with the remaining two members and the remaining two members rendered their decision.
[57] A party to a proceeding before the Hearing Division may appeal any final decision or order of the Hearing Division to the Appeal Division, which consists of at least five persons appointed by Convocation, including at least one non-lawyer. (Sections 49.32(1) and 49.29(2) of the Act.) The Appeal Panel may intervene if the decision of the Hearing Panel is unreasonable or incorrect in law. (The Law Society of Upper Canada v. Neinstein (2007), 2007 8001 (ON SCDC), 85 O.R. (3d) 446 (Div. Ct.), at paras. 40-42.)
[58] Before the Appeal Division, the Appellant argued that the remaining two-member panel did not have jurisdiction to continue the hearing because the Law Society Act and Ontario Regulations 167/07 require three members be assigned "to determine" the merits of a proceeding.
[59] The Appeal Division disagreed. They concluded that the above requirement was met when the Chair assigned three members to the panel and concluded that thereafter, s 4.4(1) of the SPPA governed, and thus there was no loss of jurisdiction.
[60] The Appellant claims the interpretation of the provisions of the Act and Regulation 167/07 and the SPPA is a question of law and should be reviewed on a correctness standard as she claims no deference is owed on a question of law. We do not agree.
[61] This is the interpretation of the Respondent’s home statute which interpretation is entitled to deference. (Dunsmuir v. New Brunswick, 2008 SCC 9.) In any event, we find that the decision of the Appeal Division is correct.
[62] According to the Appellant, s 4.4(1) of the SPPA conflicts with the provisions in the Law Society Act and the Regulation and when they conflict, the provisions of the Act and Regulation govern.
[63] We do not agree with the Appellant’s position.
[64] Section 49.23(3) of the Law Society Act provides that, “A hearing before the Hearing Division shall be heard and determined by such number of members of the Division as is prescribed by the regulations.”
[65] This provision specifically leaves open the composition and the number of members of a panel.
[66] Section 1(1) of Ontario Regulation 167 /07 provides that, “The chair or, in the absence of the chair, the vice-chair shall assign three members of the Hearing Division to a hearing to determine the merits of any proceeding other than an application listed in subsection 2(1).”
[67] The French version reads as follows: “Le président ou, en son absence, le vice-président affecte trois membres de la Section de première instance à une audience visant à établir le bien-fondé de toute instance…” The French words more clearly articulate that the three panel members are selected to a hearing which aims to deal with the merits.
[68] We agree with the Respondent that Regulation 167 addresses the assignment of members to a hearing which hearing will determine the issues on the merits. The words "to determine the merits", distinguishes the need for three members to be assigned to the hearing on the merits from the possibility of preliminary matters being heard by only one member.
[69] More importantly, nothing in the Law Society Act or the Regulation addresses the issue of quorum once the hearing is underway or what should happen where a panel member cannot complete or participate in a hearing after the commencement of proceedings.
[70] We therefore agree with the Appeal Division’s conclusion that there was no conflict between these provisions and s 4.4(1) of the SPPA, and the two remaining members of the panel had jurisdiction to continue the hearing to completion. Section 4.4(1) of the SPPA permits a panel to proceed when one of its members cannot continue and nothing in the Act or associated regulations or the Tribunal's Rules of Practice and Procedure (the "Rules") conflicts with this section of the SPPA. It is also consistent with section 93 of the Legislation Act which provides that if something is required or authorized to be done by more than two persons, a majority of them may do it.
[71] When the issue was raised by the Hearing Division, the Appellant raised no objection to the remaining two panel members continuing with and completing the hearing. We also note that to interpret the provisions to require a new hearing whenever one panel member is unavailable would be inconsistent with the Law Society's duty (under s 4.2(4) of the Act) to act in a timely and efficient manner.
[72] For these reasons, we find that the Appeal Division reasonably rejected the Appellant's argument that the Hearing Division had no jurisdiction to continue the hearing with two members after the third member was appointed to the judiciary. The Appeal on this ground is dismissed.
THE SECOND ISSUE: Was it Reasonable for the Hearing Tribunal to rely on the Expert Report regarding Mortgage Fraud and Standards of Practice in the Manner that it did?
[73] This issue was raised for the first time on this Appeal.
[74] Before the Hearing Division, the Respondent tendered an expert opinion about the standards expected of a reasonably prudent real estate solicitor conducting residential real estate transactions, dated December 21, 2010. The Hearing Division received the generic expert opinion as a guide as to the standards expected of a reasonably prudent real estate solicitor and the “red flags” or warning signs that should alert a competent lawyer to make appropriate inquiries and take action as necessary.
[75] The report was admitted on consent and the Appellant chose not to cross-examine the authors. The Appellant acknowledged that the Hearing Division could rely on the report. Before the Appeal Division, the Appellant did not raise any issue with the admissibility of the expert report or the weight given to it by the Hearing Division.
[76] There is a general prohibition on raising issues for the first time on appeal. This is because there may be prejudice where the other side could have called other evidence had an objection been raised. There is also an interest in the finality of litigation. (R v Reid, 2016 ONCA 524 at 1137-44, 132 OR (3d) 26 and Byrnes v LSUC, 2015 ONSC 2939 at 1134-35.) In this case, the Respondent could have called one of the authors of the report to testify and or adduced other evidence to address these issues.
[77] The Appellant now concedes that the report was properly admitted but claims it was not properly used.
[78] This report is useful for panel members who do not have experience or expertise in real estate law as it assists them to understand the particular issues in real estate transactions. (LSUC v Gregoropoulos, 2015 ONLSTH 76 and LSUC v Osborne, 2014, ONLSTH 169.) The report addresses standards of practice and warning signs of fraud; not the specifics of a given transaction. It does not decide the ultimate issue.
[79] No evidence was adduced by the Appellant to contradict evidence in the report. Although the report was produced in 2010 and these transactions took place from 2007 to 2009, all of them took place after the codification of responsibility to disclose all material information to lender clients in February 2007.
[80] In this case, there was no over-reliance on the generic expert report. The report was simply used to assist the tribunal members to understand the signs of possible fraud. The Hearing Division then considered the evidence in this case and decided that the transactions were more likely fraudulent than not.
[81] For these reasons, this ground of Appeal is dismissed.
THE THIRD ISSUE: Did the Hearing Division Fail to Correctly Address the Appellant’s Intention in respect of each transaction such that the decision was Unreasonable?
[82] Under s. 34(1) of the Act, the Law Society may apply to the Hearing Division for a determination of whether a licensee has breached section 33 of the Act by engaging in professional misconduct or conduct unbecoming a licensee.
[83] Section 35 of the Act provides that the penalties available to a Hearing Division Tribunal at a conduct hearing range from revocation of the member’s license, to a fine, to a reprimand, to an order that the member participate in legal education programs.
[84] The 39 page detailed reasons address all relevant issues. The Hearing Division addressed the Appellant’s experience in conducting real estate transactions both before nad after she was called to the Bar, the warning signs of fraud, and the Appellant’s obligations to her lender clients. The Hearing Division reasons also address each transaction in turn, including the documentary evidence, the Appellant’s explanation of what happened, the credibility and reliability of her testimony, and an explanation their findings in respect of the evidence on each transaction.
[85] All of this was done before the Hearing Division arrived at its conclusion that,
“Ms. Chin knowingly participated in fraud in relation to all six transactions. We found that she failed to disclose or misrepresented material facts in all six transactions, and failed to serve her clients to the standard of a competent solicitor in all six transactions. We also found that she fabricated documentation in one particular file, mislead the Society by providing the fabricated documentation during an interview, and misled her lender client with respect to her ongoing dealings with the lawyer on the other side of that transaction. In connection with this transaction, we also found that Ms. Chin had lied or admitted to lying under oath.
…the Lawyer did not strike us as a credible, sincere and honest witness…her testimony was vague, evasive, argumentative and disingenuous…She refused to acknowledge any wrongdoing on her part…and she attempted to place all responsibility for her own lack of candour and sincerity on the Law Society investigator, whom she accused of overly aggressive questioning and pressure tactics designed to extract false admissions.”
[86] Unlike the case of Law Society of Upper Canada v. Nguyen, 2017 ONSC 5431, cited by the Appellant, the Hearing Division reasonably concluded on the basis of the evidence before it that the Appellant understood her obligations but did not protect her clients’ interests. On the contrary, she “clearly disregarded instructions from her lender clients”, knowingly permitted the fabrication of documentation without advising that it had been altered, and on one occasion, she lied under oath, and provided explanations that strained credulity, notwithstanding the red flags that were apparent.
[87] The Appellant argued in the material that the decision to revoke her licence was harsh, disparate and was improperly based on the need to set an example to others[^1] and that there was unjustified disparity between the penalty imposed on the Appellant and other like cases. However, she conceded in oral submissions that revocation is the presumptive penalty for knowingly participating in fraud and that if the decision of the Hearing Division as to professional misconduct is upheld, the sanction is appropriate. (Law Society of Upper Canada v. Mucha, 2008 ONLSAP 5 and Bishop v. Law Society of Upper Canada, 2014 ONSC 5057).
[88] For the above reasons, we find the reasons for decision and penalty to be reasonable. This third ground of Appeal is also dismissed.
CONCLUSION
[89] The Hearing Division found that the Appellant knowingly participated in mortgage fraud and engaged in other related conduct unbecoming a lawyer and that her licence should therefore be revoked. She appealed that decision to the Appeal Division and the Appeal Division Panel upheld the decision of the Hearing Division.
[90] For the above reasons, we find that:
i. The Hearing Division had jurisdiction to render a decision with two members;
ii. The expert report was properly admitted, considered and relied on by the Hearing Division; and
iii. The Hearing Division decision on the merits and the penalty imposed were reasonable.
[91] For these reasons, the Appeal is dismissed.
[92] On the consent of both parties, costs are payable to the Respondent in the amount of $5,000.00 all inclusive.
___________________________ Thorburn J.
I agree
P. Smith J.
I agree
Matheson J.
Released: March 29, 2018
CITATION: Chin v. The Law Society of Upper Canada, 2018 ONSC 2072
DIVISIONAL COURT FILE NO.: 516/17
DATE: 20180329
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
SMITH, THORBURN and MATHESON JJ.
REBECCA CHIN
Appellant
– and –
THE LAW SOCIETY OF UPPER CANADA
Respondent
REASONS FOR DECISION
THORBURN J.
Released: March 29, 2018
[^1]: The cases relied on by the Appellant are distinguishable from this case. In Law Society of Upper Canada v. Gregoropoulos, [2016] L.S.D.D. No. 71, although the lawyer ought to have known he was being used to facilitate fraud in connection with real estate transactions, he did not knowingly participated in a fraudulent transaction. Similarly, in Law Society of Upper Canada v. Talarico, [2014] L.S.D.D. No. 23 the Hearing Division accepted that the lawyer did not realize that the increased price on a flip was a material fact that he ought to disclose to his lender client.