Law Society of Ontario v. McGrath, 2026 ONLSTH 28

LAW SOCIETY TRIBUNAL

HEARING DIVISION

Date: February 11, 2026 Tribunal File No.: 25H-189

BETWEEN:

Law Society of Ontario Applicant

• and -

Susan Teresa McGrath Respondent

Before: Lubomir Poliacik (chair), Cheryl Siran, John F. Spekkens Heard: January 14, 2026, by videoconference

Appearances: Alexa Ferguson, for the applicant Wayne Cunningham, for the respondent

Summary: McGRATH – Procedure – Adjournments – Interim Interlocutory Orders – The Society sought an interlocutory suspension of the Lawyer’s licence – The Lawyer requested an adjournment, which the Law Society did not oppose, but it sought an interim interlocutory suspension if the adjournment was granted – The hearing was adjourned for a short period of time in conjunction with the Lawyer’s undertaking not to practise ‒ The request for an interim interlocutory suspension was dismissed.

REASONS FOR DECISION ON MOTIONS FOR ADJOURNMENT AND AN INTERIM INTERLOCUTORY SUSPENSION

1Cheryl Siran (for the panel):– The Law Society has sought an interlocutory suspension of the licence of Susan Teresa McGrath (the Licensee).

2The Licensee requested an adjournment of the proceeding. The Law Society did not oppose the request for an adjournment; however, it sought an interim interlocutory suspension pending the hearing of the motion for the interlocutory suspension. The Licensee submitted that she would execute an undertaking not to practise and this document would sufficiently address any concerns of the Law Society in the interim.

3In accordance with Law Society of Upper Canada v Bogue, 2017 ONLSTH 119, we determined that the motion for an interlocutory suspension should be adjourned.

4After hearing submissions of the parties, we declined to make an interim order for suspension and accepted the Licensee’s undertaking. Our reasons are as follows.

THE ALLEGED MISCONDUCT

5On October 9, 2025, the Law Society received a complaint from a beneficiary of an estate for which the Licensee was retained. The allegation is that an interim distribution of $200,000 had not been paid, and the Licensee had advised the beneficiary that her trust account had been compromised and contained insufficient funds to make the payment. An investigation was subsequently authorized on October 22, 2025.

6The Licensee had an interview with the Law Society investigator two days later on October 24. The Licensee confirmed the information of the beneficiary and reported that there were numerous fraudulent transactions that occurred in her trust account from April 2025 to August/early September 2025, and that she had reported these to the bank. The total fraudulent amounts were related to transactions of approximately $555,355. The Licensee indicated that she believed her identity had been stolen after providing credentials to someone posing as RBC fraud staff in 2024.

7The investigator’s affidavit filed on the motion also indicates that in this discussion, the Licensee disclosed that her trust reconciliations were not up to date and various investigative requests for disclosure were subsequently made by the Law Society. The Licensee was unable to replenish the trust account either personally or through financing and admitted she had not filed income tax returns for several years.

8At the time of the interview with the Law Society investigator, the Licensee had not reported the irregularities to LawPRO, which she has subsequently done. The record does not confirm whether the Licensee has made any police report.

9On November 7, 2025, the Licensee provided various banking and trust records to the Law Society, which the investigator indicated were partial, disorganized, internally inconsistent, or did not reconcile. The investigator also indicated that several required documents requested remained outstanding. Because of these concerns (among others), the Law Society requested, and the Licensee agreed, to cease using her trust account on November 26, 2025.

10The Law Society admits the investigation is in its early stages and that the Licensee has generally co-operated. It also admits that it cannot rule out that the Licensee’s account of fraudulent activities remains a possible explanation for the missing funds.

11The Law Society filed its motion on December 11, 2025. The investigator’s affidavit was sworn on December 18, 2025, and the Law Society served its motion materials on December 22, 2025, for the motion hearing scheduled January 14, 2026.

12The Licensee has not filed any materials. The Licensee retained counsel on January 9, 2026.

INTERIM SUSPENSIONS

13An interlocutory order may not be made unless there are reasonable grounds for believing that there is a significant risk of harm as specified in s 49.27(2) of the Law Society Act, RSO 1990, c L.8 (the Act).

14As outlined by Chair Mercer in Law Society of Ontario v Denchik, 2025 ONLSTH 166, at para 6:

6Because interim orders are a type of interlocutory order, it follows that interim orders may not be made unless the threshold established by s. 49.27(2) of the Act is met. This interpretation of s 49.27(2) is consistent with the language used in the section and the relevant objectives of the Act which are protection of the public and the administration of justice and fairness to licensees.

15Additionally, meeting the s 49.27(2) threshold does not mean that an interim order must be made and the decision remains a discretionary decision. As stated in Denchik at para 8, “In exercising that discretion, it is important to recognize that interim orders address risk of harm and that it is the risk of harm prior to the hearing of the motion that must be considered.”

ANALYSIS

16As per s 49.27(2) of the Act, an order for interlocutory suspension can be made in circumstances where there are reasonable grounds for believe that there is a significant risk of harm to members of the public, or public interest, if not made.

17We are of the view that the threshold is not met in this case. After accepting that an adjournment is proper, we further accept that the Licensee’s execution of an Undertaking Not to Practise is sufficient to address any interim concerns before the interlocutory motion can be fully heard.

18First, although the allegations are highly concerning, it is admitted by the Law Society that the investigation is in early stages and there may be other factors (here, identity theft leading to fraudulent transactions) that explain the diminished trust account. The Licensee has not yet been able to fully respond and explain the totality of the matter. Given that the Licensee was served right before the Christmas break (December 22), we accept that she has acted prudently in obtaining counsel as of January 9, 2026, given the holidays, and has not taken merely “limited steps” as suggested by the Law Society.

19We accept the submissions of the Licensee’s counsel that the Law Society’s materials also weigh against an order. In its materials, the Law Society has indicated the Licensee has been generally co-operative. The Licensee never hid the fact of the missing trust funds, confirmed the trust account shortage, and advised of steps being taken to remedy. Further, the Licensee agreed to be interviewed two days after the complaint, she reported to LawPRO, and additionally, she voluntarily complied with the request to cease using her trust accounts. Taken cumulatively, these actions demonstrate a recognition of the seriousness of the matter and a willingness to abide by an undertaking not to practise.

20Third, we are concerned that an interim order for suspension would cause irreparable damage to the Licensee. It is notable that the Licensee is 72 years old and has been practising as a sole practitioner for approximately 44 years. We are not aware of any prior disciplinary proceeding. The community she serves, Iroquois Falls, is also a small Northern community with limited access to legal services and limited alternatives to legal services. A suspension at this stage without a full interlocutory hearing on the merits could effectively end the Licensee’s practice in this community, which has significant consequences to the public and the Licensee.

21Finally, the adjournment is brief, with the return date on the interlocutory motion being January 30, 2026, approximately two weeks away.

22These factors lead us to conclude that there is limited risk of harm to the public in the face of potential significant harm to the Licensee. We accept that an order for suspension, as opposed to a voluntary undertaking to cease practice, is perceived differently by the public and agree with the Licensee’s request to accept her undertaking, despite the consequences of breaching effectively appearing to be the same.

ORDER

23For these reasons, we ordered as follows:

1. The interlocutory motion is adjourned to January 30, 2026 at 10:00 AM for hearing.

2. The request for an interim interlocutory suspension is dismissed.

3. The Licensee will abide by the terms of the executed Undertaking, Acknowledge, Direction and Consent not to practise law until further order of the Tribunal.