LAW SOCIETY TRIBUNAL

HEARING DIVISION

Date: June 2, 2026 Tribunal File No.: 25H-008

BETWEEN:

Law Society of Ontario Applicant

• and -

Michael Peter Joseph Panacci Respondent

Before: Teresa Donnelly (chair), Murray Klippenstein, John F. Spekkens Heard: February 24, 2026, by videoconference

Appearances: Andrea Luey, for the applicant Respondent, self-represented

Summary: PANACCI – Misappropriation – Findings and Penalty – The Law Society alleged and the Lawyer admitted that he misappropriated funds from a client’s account – The panel found that he engaged in professional misconduct – The Lawyer sought to be given permission to surrender his licence but did not provide evidentiary support to establish exceptional circumstances to negate the presumptive penalty of revocation – The panel noted that although the Lawyer repaid most of the money, repayment did not make the presumptive penalty inapplicable – The panel ordered that the Lawyer’s licence be revoked immediately – Submissions on costs were invited.

REASONS FOR DECISION

INTRODUCTION

1Teresa Donnelly (for the panel):– This matter concerns whether lawyer licensee Michael Panacci, who admits to misappropriating $85,230 in trust funds belonging to a single client, should have his licence revoked or, alternatively, should be permitted to surrender it.

2For reasons outlined below, we accepted the agreed statements of facts, and we found that a revocation of licence is the appropriate penalty.

BACKGROUND

3On January 31, 2025, the Law Society of Ontario commenced an application under s 34(1) of the Law Society Act, RSO 1990, c L.8, seeking a determination of whether Mr. Panacci engaged in professional misconduct by misappropriating trust funds belonging to a client, and seeking an order under s 35 of the Act.

4It is alleged that between June 14 and September 14, 2023, Mr. Panacci misappropriated $85,230 from funds received in trust on behalf of Client A by removing and using the money without authorization, including for his personal benefit. As a result of these allegations, Mr. Panacci is subject to an interlocutory order granted on July 5, 2024 suspending his licence to practise law: 2024 ONLSTH 102.

5On January 5, 2026, Mr. Panacci entered into an agreed statement of facts (ASF) with the Law Society in which he admitted misappropriating $85,230 in trust funds belonging to Client A and further admitted that such conduct constitutes professional misconduct.

6On February 24, 2026, at the hearing, we considered the ASF and Mr. Panacci’s admissions and found that he had engaged in professional misconduct. We also heard submissions on penalty.

7During the hearing, Mr. Panacci sought to file documents in evidence. When the Law Society objected, because he had not complied with the Tribunal’s Rules, Mr. Panacci withdrew the documents, on the understanding that should he adduce expert evidence on penalty, as set out below, he could tender them at that time.

8Prior to February 24, 2026, over the course of several months, Mr. Panacci attempted to retain an expert to provide evidence on penalty but encountered difficulties in doing so. As a result, the hearing was adjourned on February 24, 2026 on the following terms: If Mr. Panacci obtained and filed an expert report by May 1, 2026, the penalty hearing would be resumed to receive further evidence, including any necessary foundational evidence from Mr. Panacci or responding evidence from the Law Society. If no expert report was filed by that date, we would decide penalty on the basis of the ASF and the submissions made on February 24, 2026.

9On May 5, 2026, we were advised that Mr. Panacci had not filed an expert report. Accordingly, these are our reasons on findings and penalty.

THE FACTS

10The ASF entered into by Mr. Panacci and the Law Society establishes the following facts, which we accept.

11During the relevant period, Mr. Panacci practised as a sole practitioner with no staff. His practice consisted of civil litigation, construction law, real estate, and tax law.

12On May 15, 2023, Client A retained Mr. Panacci to act on a mortgage transaction with the Canadian Imperial Bank of Commerce (CIBC).

13On June 14, 2023, Mr. Panacci received net mortgage proceeds of $204,088 from CIBC on behalf of Client A, which were deposited into Mr. Panacci’s trust account. Immediately prior to that deposit, the balance in Mr. Panacci’s trust account was $2,271.50, of which $1,412.50 represented retainer funds received from Client A.

14Rather than promptly disbursing the $204,088 mortgage proceeds to his client, Mr. Panacci acknowledges that he used $85,230 of the $204,088 mortgage proceeds for his own benefit.

15Between June 14, 2023, and September 14, 2023, Mr. Panacci made a series of transfers from his trust account to his general account, using funds held in trust for Client A. The majority of these funds were immediately paid out from his general account, via e-transfers, to unknown recipients on the same day the funds were received in his general account.

16Misappropriation by a Law Society licensee involves two elements: the unauthorized use of client property for the licensee’s own purposes, and a knowledge component. Knowledge may take the form of actual knowledge, wilful blindness, or recklessness: Law Society of Ontario v Wilkins, 2021 ONLSTA 15 at para 82.

17Mr. Panacci admits that in making the above transfers he misappropriated $85,230 of funds held in trust for Client A.

18Mr. Panacci began advancing funds to Client A on August 5, 2023, when he made a payment of $20,000. Mr. Panacci subsequently made additional payments to Client A as follows:

• $100,000 on September 22, 2023;
• $44,000 on September 29, 2023;
• $33,668.50 between October 6 and December 19, 2023;
• $598.50 on March 15, 2024; and
• $498.50 on March 18, 2024.

19In total, of the $204,088 mortgage proceeds belonging to Client A, Mr. Panacci has paid $198,765.50 to Client A. He remains indebted to Client A in the amount of $5,322.50.

20During the hearing, Mr. Panacci repeatedly stated that he accepts full responsibility for his conduct. He acknowledged that his actions were inappropriate and fell well below the acceptable standard of professional conduct. He further recognized the seriousness of his misconduct, acknowledging that trust funds are “sacrosanct.”

PENALTY

21The only evidence before us was the ASF containing Mr. Panacci’s admission of misappropriation of $85,230. Mr. Panacci did not adduce any further evidence.

22The Law Society’s position is that the presumptive penalty of revocation applies in this case and, in the absence of any evidence supporting exceptional circumstances, that revocation is the appropriate penalty.

23Mr. Panacci understands that his ability to practise law has come to an end but submits that he should be permitted to surrender his licence, rather than having it revoked.

24We agree with the Law Society’s position that the presumptive penalty for misappropriation is revocation, absent exceptional circumstances. As Mr. Panacci adduced no evidence in this regard, there is no evidentiary basis upon which to find that exceptional circumstances exist.

25In part the presumptive penalty of revocation reflects the “pressing need to send a consistent message that engaging in fraudulent conduct by a lawyer is a matter that will not be tolerated because of its impact on the profession as a whole”: Bishop v Law Society of Upper Canada, 2014 ONSC 5057 at para 28.

26We also observe that, although all but $5,322.50 of the money misappropriated from funds held in trust for Client A was repaid, repayment does not make the presumptive penalty of revocation inapplicable: Law Society of Ontario v Wilkins, 2021 ONLSTA 15 at para 108; Law Society of Ontario v Schroeder, 2025 ONLSTH 162 at para 14.

27By misappropriating trust funds held for Client A, Mr. Panacci knowingly engaged in dishonest conduct. In doing so, he betrayed the solicitor‑client relationship, breached the essential trust placed in lawyers by clients and financial institutions — a trust that is fundamental to the safe, efficient, and reliable completion of real estate transactions — and seriously undermined public confidence in the legal professions.

28In the circumstances, we order that Mr. Panacci’s licence to practise law is revoked.

COSTS

29If the Law Society is seeking costs, it should deliver its submissions by June 16, 2026, and Mr. Panacci should deliver responding submissions by June 30, 2026.

ORDER

30For these reasons, we order:

1. The respondent’s licence to practise law is immediately revoked.
2. The respondent shall comply fully with the terms of the Law Society’s Guidelines for Former Lawyers Whose Licences Have Been Revoked or Who Have Been Permitted to Surrender Their Licences.
3. The respondent shall: a. make restitution of $5,322.50 to Client A by September 1, 2026. Interest will accrue on any unpaid portion at a rate of 4% per year, or b. if the matter proceeds through the Compensation Fund, the respondent shall pay to the Compensation Fund any amount paid by the Fund in relation to Compensation Fund case number CAS-178042-B5L8W6, to a maximum of $5,322.50.