Murray v. Law Society of Ontario, 2023 ONSC 3118

Murray v. Law Society of Ontario, 2023 ONSC 3118

CITATION: Murray v. Law Society of Ontario, 2023 ONSC 3118

COURT FILE NO.: 029/23

DATE: 20230525

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

D.L. Corbett, Leiper, and Muszynski JJ.

BETWEEN:

STUART CAMERON MURRAY

Appellant

– and –

LAW SOCIETY OF ONTARIO

Respondent

Self-represented

M. Joanne MacMillan, for the Respondent

HEARD at Toronto by ZOOM: May 18, 2023

REASONS FOR DECISION

Muszynski J.

1Mr. Murray appeals the order of Gilmore J. dated December 8, 2022, terminating the Law Society of Ontario’s trusteeship over Mr. Murray’s law practice and granting related relief.

BACKGROUND

2The Law Society became involved with Mr. Murray following complaints dating back to 2015 alleging that Mr. Murray had misappropriated client funds. It was appointed trustee over Mr Murray’s law practice by court order in 2018.

3Mr. Murray was charged criminally in relation to these events. As a result of an agreement with the Crown respecting sentence, Mr Murray pleaded guilty and was convicted on November 26, 2020. Mr. Murray is now seeking to appeal and to set aside his guilty plea. Lauwers J.A. extended the time for Mr. Murray to bring that appeal (2022 ONCA 906), which is now expected to be scheduled this fall (2023).

4Mr Murray was subject to disciplinary proceedings before the Law Society arising from the same matters that were the basis of his criminal conviction. On January 20, 2021, Mr. Murray and the Law Society presented an agreed statement of facts and joint submission on penalty at the Law Society Tribunal. By decision dated April 30, 2021, the Tribunal found that Mr Murray had committed professional misconduct and revoked Mr. Murray’s licence to practice law. Mr. Murray is currently appealing this decision. On consent before the Law Society Appeal Tribunal, the appeal of the Tribunal decision has been stayed pending the outcome of the criminal appeal.

5In brief, Mr Murray takes the position that he did not commit acts of dishonesty, and that his plea agreement in the criminal proceedings, and the agreed statement of fact and penalty agreement in the Law Society proceedings were a product of his extreme mental state. He takes the position that he has made the Law Society whole for any shortfalls found in his trust accounts, and that the underlying problems that led to all these events were the result of errors made by TD Bank causing apparent shortfalls in his firm’s trust accounts. He takes the further position that his ability to investigate and seek rectification of his trust accounts has been impeded by the Law Society’s trusteeship of his law practice.

DECISION BELOW

6The Law Society takes the position that it has discharged its responsibilities as trustee over Mr Murray’s law practice by redirecting client files to other lawyers and by paying out claims from the funds realized from Mr Murray’s trust account and from the Law Society’s Compensation Fund. On this basis it moved before the court below for an order terminating the trusteeship.

7Among other things, the court below (i) discharged the Law Society as trustee, (ii) passed the trustee’s accounts, (iii) approved trustee expenses and compensation of $33,533.21, and (iv) made the following order in respect to client and accounting records and related property:

3. THIS COURT ORDERS that the Law Society may, in its discretion and from time to time after the date of this Order and except as set out below, destroy in a manner to protect confidential client information, any part of the property recovered from the Respondent’s former professional business including client flies, computers and accounting records. The Law Society agrees to retain such files for a period of one year and permit access by the Respondent as requested and within reasonable limits in terms of volume and availability given that the files are stored off site.

8Mr. Murray appeals primarily on three grounds:

1. The motion judge erred or was procedurally unfair in failing to grant Mr Murray’s adjournment request given the pending appeal proceedings in the criminal proceedings and the discipline proceedings and contemplated civil proceedings against TD Bank.

2. The motion judge erred in fixing the costs and fees of the trustee.

3. The motion judge erred in authorizing the Law Society to destroy client flies, computers and accounting records after one year.

JURISDICTION

9The parties agree, and we accept, that the Divisional Court has jurisdiction over this appeal pursuant to s. 19(1)(a)(1.2) of the Courts of Justice Act, RSO 1990 c. C. 43.

ANALYSIS

Issue 1: Adjournment request

10Before us, Mr. Murray candidly acknowledged that his appeal related to the adjournment request is not strong. I agree. The court below is owed considerable deference in the exercise of discretion to grant or deny an adjournment request: this court will only interfere when the discretionary decision was “clearly wrong”: Ontario Securities Commission v. Go-To Developments Holdings Inc., 2022 ONCA 328 at para 11.

11The motion judge refused Mr. Murray’s request for an adjournment of the motion after noting that the request was purportedly to allow Mr. Murray an opportunity to pursue separate litigation related to his criminal conviction and the revocation of his licence, which she found was not relevant to the Law Society’s motion to terminate the trusteeship. It cannot be said that motion judge’s decision to deny the adjournment request was “clearly wrong” or procedurally unfair. To the contrary, it was practical: there is no need for the trusteeship to continue, and any issues related to document retention and production, and any claims against TD Bank (or against the Law Society, for that matter) may be addressed in proceedings in which those claims are raised. I would not give effect to this ground of appeal.

Issue 2: Compensation

12The Record below establishes the length of the trusteeship (4 years), the size of the law practice (155 clients), the volume of material to review (over 70 banker’s boxes of client files) and included detailed dockets of the time spent acting as trustee.

13Mr. Murray submits that the motion judge erred in ordering compensation without taking into account his position that the Law Society did not carry out its role of trustee in good faith by thwarting his attempts to investigate the allegations against him when it stepped in as trustee.

14The court below did address this issue and rejected Mr. Murray’s allegations of bad faith. Further, the trusteeship is undertaken for the benefit of affected clients and in the public interest. There is no doubt that there were serious problems, including shortfalls, in Mr Murray’s trust accounts, and that these problems affected clients. The trusteeship was authorized by court order, and the trustee is entitled, by statute, to its expenses and compensation for performing its role as trustee. There is no reviewable error in fact or law with the motion judge’s decision to order compensation to the Law Society for the trusteeship, or in the quantum ordered. I would not give effect to this ground of appeal.

Issue 3: Retention of files

15Mr. Murray’s files have been in the custody of the Law Society since 2018. He wants this court to vary paragraph 3 of the motion judge’s order to provide that the files be returned to him.

16Mr. Murray is not currently a lawyer, and his former clients are not currently his clients. Returning the client files to him is not an option. Alternatively, Mr. Murray submits that his files should be retained and not destroyed as they may be necessary to allow him to make full answer and defence in his criminal matter if his guilty plea is overturned. Similarly, the files could be relevant to his matter before the Law Society, his civil claim against TD Bank, and perhaps other claims he may yet initiate.

17At the time of the motion below, Mr Murray had pleaded guilty to criminal charges and had made a joint submission with the Crown in respect of sentence. He entered into a joint submission with the Law Society respecting the discipline proceedings against him. Both at the Law Society and in the criminal proceedings, penalties consistent with the joint submissions were imposed. Mr Murray had sought to bring an appeal of the criminal decision, long past time for bringing such an appeal, and the Law Society had agreed to defer his late appeal proceedings before the Law Society Appeal Panel until the criminal appeal proceedings were disposed of by the Court of Appeal. The order of the motions judge required the Law Society to retain documents for a year, likely a sufficient period for the outstanding appeal proceedings to be addressed. Such a disposition was reasonable at the time it was made.

18We are advised that the appeal is to be scheduled for hearing “sometime this fall” (2023). Of course, the decision on that appeal may be taken under reserve. If the appeal is allowed, it is likely that a new trial would be ordered. These are new circumstances and they cast the issue of document retention in a somewhat different light. It is in this context that the Law Society now agrees to an order varying paragraph 3 of the impugned order with respect to the timing of permissive destruction of law practice files and property. The order currently requires the Law Society to retain the property for one year. It would be unreasonable to require the Law Society to retain materials in perpetuity. However, given the timing, it would be reasonable for these materials to be retained, so that they are available to Mr. Murray for a new criminal trial, if it is ordered by the Court of Appeal. The Law Society is content that we make an order to this effect.

19Therefore, paragraph 3 of the impugned order is varied to read as follows:

3. THIS COURT ORDERS that the Law Society may, in its discretion and from time to time after the date of this Order, and except as set out below, destroy in a manner to protect confidential client information, any part of the property recovered from the Respondent’s former professional business including client flies, computers and accounting records. The Law Society agrees to retain such files until, at the earliest, December 31, 2024, and to permit access to them by the Respondent within reasonable limits in terms of volume and availability given that the files are stored off site. The Law Society shall give 60 days notice to the Respondent prior to the destruction of any files and shall consider any reasonable request by the Respondent to an extension of this deadline. If there is an extension request made by the Respondent that is not agreed to by the Law Society, then the Respondent may bring a motion in the Superior Court of Justice to vary this term of the Order.

20Nothing in this order precludes Mr. Murray from moving in his other proceedings to preserve or obtain records held by the Law Society, on reasonable terms, for the purposes of those separate proceedings.

CONCLUSION

21On consent of the Law Society, paragraph 3 of the motion judge’s Order shall be varied in the form set out above. The remainder of the appeal is dismissed. On consent there shall be no costs ordered with respect to this appeal.

Muszynski J.

I agree:

D.L. Corbett J.

I agree:

Leiper J.